Boeing Workers Accept New Contract, Ending Strike After Seven Weeks

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Boeing's Latest Contract Offer Details

The latest contract offer from Boeing to its machinists includes several key provisions:

Wage Increase: The offer provides for a 38% pay increase over four years. This increase was a significant factor in the union members' decision to accept the contract.

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Ratification Bonus: Each worker will receive a $12,000 bonus upon ratification of the contract. This bonus is a combination of a $7,000 ratification bonus and a $5,000 one-time payment.
Retirement Contributions: The contract includes enhanced contributions to retirement savings plans. However, it does not restore pensions, which was a point of contention for some veteran employees.

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Cost Increases: The deal is expected to increase Boeing's salary costs by approximately $1.1 billion over four years.
Other Benefits: The contract also includes provisions for higher pay increases and a bolstered ratification bonus, addressing some of the workers' primary demands.

Reasons Behind the Strike

The strike by Boeing's machinists was primarily due to dissatisfaction with the company's previous contract offers, which did not meet the workers' demands for better wages and benefits. Key reasons include:

Insufficient Wage Increases: The initial offers from Boeing were not deemed sufficient by the workers. For instance, the company's first offer included a 25% wage increase over four years, which was later increased to 30%, then 35%, and finally 38%.
Loss of Pensions: The company's refusal to restore pensions was a significant issue for many veteran employees. The new contract does not restore these pensions, which led to some opposition within the union.
Threats from Boeing: The company threatened to build its new series of jets outside its home base of Washington state if the union did not accept its terms. This threat was seen as an attempt to force the workers to accept a less favorable contract.

Impact and Resolution of the Strike

The strike had significant impacts on both Boeing and its workers:

Production Disruption: The strike, which lasted seven weeks, severely disrupted Boeing's production of jetliners, leading to substantial financial losses. The company estimated the financial impact at about $100 million per day.
Financial Strain: The strike exacerbated Boeing's already precarious financial situation, leading to a $6.2 billion loss in the third quarter and a near-catastrophic accident earlier in the year that had already upended its production and finances.
Resolution: The strike ended when the union members voted to accept the new contract offer. This resolution was seen as a victory for the workers, who had stood strong in their demands. The contract was approved by 59% of the union members, with 41% voting against it, indicating some dissatisfaction even within the union.
Future Prospects: The resolution of the strike is expected to help Boeing restart its factories and improve its operational and financial health. The new CEO, Kelly Ortberg, who has been in the role for only three months, has inherited a company in crisis and aims to rebuild its culture and improve the quality of work in its factories.