Boeing Strike Ends After Workers Approve New Contract

Boeing Strike Ends After Seven Weeks as Workers Approve New Contract

Boeing workers on the West Coast ended a contentious seven-week strike on Monday after ratifying a new contract, bringing relief to the troubled aerospace giant. The strike had significantly impacted jet production and worsened Boeing’s financial challenges. Union members voted 59% in favor of the new deal, which includes a 38% pay increase over four years, easing pressure on new CEO Kelly Ortberg after two earlier offers had been rejected.

Shares of Boeing rose nearly 1.2% in early trading on Tuesday following the vote. “This is a victory. We can hold our heads high,” said Jon Holden, the union’s lead negotiator, addressing workers after the results were announced. "Now it's our job to get back to work."

The strike, the first by Boeing’s largest union in 16 years, had begun on September 13 and involved about 33,000 machinists working on Boeing’s 737 MAX, 767, and 777 jets. Workers had been demanding a 40% wage increase and the restoration of a traditional pension plan, which had been replaced a decade ago with a 401(k) retirement plan.

While the pension will not be reinstated, workers will receive higher company contributions to their 401(k) plans. Boeing also promised to build its next aircraft in the Seattle area, a significant commitment for workers who had never received such a pledge before.

"I'm ready to get back to work," said David Lemon, a Seattle-based worker who voted in favor of the contract. He noted that the combined pay hike and a 4% bonus – the guaranteed minimum payout under the reinstated incentive plan – effectively matched the 40% increase workers had been seeking.

President Joe Biden and Acting Labor Secretary Julie Su, who helped facilitate the negotiations, congratulated both sides on the deal. "We've shown that collective bargaining works," Biden said, underscoring the importance of the agreement.

With the strike now over, Boeing faces the challenge of ramping up production. Analysts expect a slow recovery, with 737 MAX output projected to remain in the single digits per month for some time, far below the pre-strike target of 38 per month. Jefferies analysts predict Boeing could return to that production level by 2026.

The strike had been costing Boeing around $100 million a day in lost revenue, prompting the company to raise $24 billion in funds to maintain its investment-grade credit rating. The end of the walkout brings a much-needed reprieve for Boeing, though it will take weeks to fully restore production and cash flow. Workers are expected to begin returning to the factory on Wednesday, though some will need retraining due to their time away.

The new contract includes a significant pay increase, with Boeing stating that average annual pay for machinists will rise from $75,608 to $119,309 by the end of the four-year agreement. However, some workers, like Thomas Amilowski, a 777 technician, expressed disappointment with the deal. Amilowski, who voted against the contract, criticized union leadership for what he saw as a “defeatist mindset.”

The contract adds an estimated $1.1 billion to Boeing’s wage bill over four years, plus an additional $396 million in ratification bonuses for union members. Nearly 80% of eligible workers participated in the vote, with more than 26,000 casting ballots.

Despite some lingering dissatisfaction, union officials like Holden emphasized the importance of moving forward. “There were those who were definitely not happy with the vote,” Holden acknowledged. “But now we can rebuild the relationship with Boeing leadership and get back to doing what we do best.”