Boeing Strike: Union Rejects Latest Pay Offer, Prolonging Production Halt
By Allison Lampert and David Shepardson
(Multibagger) - The union representing thousands of striking Boeing (NYSE: BA) U.S. factory workers announced late on Tuesday that a survey showed members were overwhelmingly against the planemaker's latest pay proposal, which Boeing described as its "best and final."
Earlier in the day, Boeing agreed to extend the timeline for a vote on a new contract after the union rejected the company's initial Friday deadline.
Over 32,000 Boeing workers in the Seattle area and Portland, Oregon, have been on strike since Sept. 13, halting production of airplane models, including the popular 737 MAX.
Nearly 95% of workers rejected Boeing's offer of a 25% pay raise over four years, prompting the strike. Boeing's improved proposal announced on Monday increased the pay gain to 30% and restored a performance bonus, but the union's survey indicated this was still insufficient.
"The survey results from yesterday were overwhelmingly clear, almost as loud as the first offer: members are not interested in the company's latest offer," said the International Association of Machinists and Aerospace Workers District 751 on Tuesday.
The union is seeking a 40% pay raise and the restoration of a defined-benefit pension that was removed a decade ago.
Boeing, which did not immediately comment, put forth the latest offer on Monday without prior negotiation with the union. The union declined to put it to an immediate vote, opting instead to survey its members first.
"We heard you, and you've told us loud and clear that this proposal did not go far enough to address our members' priorities," the union stated on Tuesday. "We are ready to schedule mediated or direct talks with Boeing to resolve this strike."
BACKTRACKING
Labor experts say Boeing's move to extend the vote deadline is another instance of backtracking that could damage its credibility.
Before the strike, Boeing's commercial planes chief Stephanie Pope told workers that the proposal at that time was the best deal they would get. Yet, on Monday, the company made an improved "best and final" offer.
"It's not a great thing for Boeing to say this is our final offer and then fairly quickly reverse," commented Harry Katz, a professor of collective bargaining at Cornell University's School of Industrial and Labor Relations.
Striking workers are set to miss their first paychecks on Thursday.
Katz advised that workers feeling the financial strain should consider Boeing's latest offer, which he described as solid.
The strike is the latest event in a tumultuous year for Boeing, which started with a January incident where a door panel detached from a new 737 MAX jet mid-air.
During the strike, Boeing has frozen hiring and started furloughs for thousands of U.S. employees to cut costs. Non-union workers are planned to take one week of furlough every four weeks on a rolling basis for the duration of the strike.
According to economic data analytics firm IMPLAN, if the strike continues through Sept. 27, it could reduce U.S. gross domestic product by $1 billion and result in $500 million in lost labor income.
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Analysis: Breaking It Down
What Happened?
- Boeing's factory workers are on strike for the first time since 2008.
- They rejected Boeing’s initial and improved pay offers, demanding higher raises and restored pensions.
Why It Matters:
- Boeing's production is halted, affecting their ability to deliver airplane models like the 737 MAX.
- This strike impacts the economy, potentially reducing U.S. GDP by $1 billion and losing $500 million in labor income if it continues.
How It Affects You:
- If you're invested in Boeing, stock prices may fluctuate due to production delays.
- If you work in industries connected to aviation, there could be ripple effects like delayed projects and reduced earnings.
- On a broader scale, economic disruptions can indirectly affect various sectors and the overall market.
By understanding these dynamics, you can better navigate the financial implications and make informed decisions about your investments and career.