Boeing’s largest labor union has reached a milestone in resolving the ongoing strike that has severely impacted its aircraft production in the Pacific Northwest. The International Association of Machinists (IAM) announced on 19 October that it had reached an “updated proposal” with Boeing, paving the way for a vote by, Boeing machinists, union members that could bring an end to the five-week-long strike. The proposed contract includes significant wage increases and additional benefits, reflecting the demands of the workforce.

Boeing’s Updated Proposal

The new contract proposal, which is scheduled for a vote by the union’s 33,000 members on 23 October, could conclude the strike if approved by a majority. The proposal is a marked improvement over the initial offers from Boeing, addressing key concerns that led to the strike.

The proposed contract includes a 35% wage increase over the next four years. This pay rise will be structured as follows:

• 12% increase in the first year
• 8% increase in both the second and third years
• 7% increase in the fourth year

These increases are aimed at meeting the demands of workers who walked off the job in September, dissatisfied with previous offers.

Strike Overview

The strike began on 13 September, following the rejection of an earlier proposed contract that had been recommended by union leaders. Despite the initial contract offering a 25% wage increase over four years, it failed to gain member support. Boeing’s second offer, which included a 30% wage increase, was presented on 23 September, but the union opted not to bring that offer to a vote.

Ratification Payments and Performance Program

As part of the new deal, workers would receive a $7,000 payment upon ratification of the contract. Additionally, Boeing has agreed to reinstate the Aerospace Machinists Performance Program, a scheme that rewards employees based on metrics such as quality, safety, and productivity. This program provides workers with the opportunity to earn additional payouts if certain performance targets are met, further incentivizing productivity and workplace safety.

Retirement Plan Contributions

The contract also includes provisions to strengthen workers’ retirement benefits. Boeing has committed to making one-time contributions of $5,000 to each worker’s 401(K) retirement plan. Alongside this one-time contribution, the company has agreed to increase its ongoing contributions to these plans, ensuring long-term financial security for its workforce.

The Impact of the Strike

The strike has had a profound impact on Boeing’s operations in the Pacific Northwest, forcing the company to halt production of key aircraft models, including the 737, 767, and 777. However, Boeing has continued assembling the 787 Dreamliner at its non-unionized facility in North Carolina, allowing the company to maintain some level of production during the labor stoppage.

To mitigate the financial strain caused by the strike, Boeing implemented furloughs and requested that suppliers temporarily halt inbound shipments. However, the prolonged nature of the strike has led to a more drastic measure. On 11 October, Boeing announced that it would be cutting 17,000 jobs, representing 10% of its workforce, as part of broader cost-saving measures.

Looking Ahead

The upcoming vote tomorrow (23 October) will be a pivotal moment for both Boeing and its workforce. The IAM has encouraged its members to carefully consider the proposal, noting that the updated contract provides substantial wage increases and other improvements that could justify ending the strike.

“We have received a negotiated proposal and resolution to end the strike, and it warrants presenting to the members and is worthy of your consideration,” the union said. “We are finalizing the strike settlement agreement, which will be completed soon, along with additional contract details to provide you with a clear understanding of the offer.”

Boeing has also expressed optimism about the proposal, stating:

“We look forward to our employees voting on the negotiated proposal.”