Boeing workers have accepted a new pay offer at the end of a seven-week strike that weighed on the company’s operations and finances. The deal approved by 59 percent of the IAM-represented workers gives Boeing employees a 38 percent increase in pay over four years, a one-time $12,000 bonus, and improved retirement benefits. According to the IAM, the deal is a step toward “respect and fair wages in the workplace.”
The walkout affecting about 30,000 Boeing employees began last Wednesday and has brought production to a near standstill. The union had been seeking an increase of 40%, among other demands, after rejecting Boeing’s last two offers. Workers are scheduled to return to work as early as today, with others by November 12.
Boeing CEO Kelly Ortberg said of the tough period, “Acknowledging that the recent couple of months have not been easy for any one of us, we all work for the same company; we are all part of the same team.”.
The White House has been clear that the situation is critical, with Acting US Labor Secretary Julie Su visiting Seattle last month to facilitate negotiations, and Boeing plays a critical role in the national economy.
Financial Impacts and Recent Losses
This labor action cost Boeing a massive price for its financial health since consultancy firm Anderson Economic Group estimated that the aerospace company would lose nearly $10 billion. Boeing’s division for commercial airplanes reported that it incurred an operating loss of $4 billion during the quarter that ended in September. In a measure to stabilize its finances, Boeing recently floated a share sale worth $20 billion, which is said to be necessary to fund its activities and service debt during the protracted industrial action.
In addition, the company is going to reduce workforce. It has already announced 17,000 redundancies for the company. Notices are reportedly scheduled by mid-November and indicate the step taken by the company to curb expenses.
Operational Set-Backs and Continuing Challenges
This setback is coming after an eventful year for Boeing; it was beginning with the critical failure of one of its commercial aircrafts during the months of January. It even could not manage to wind off at a positive end for the space division where the Starliner capsule faced a botched test return to Earth without astronauts onboard. The setbacks have marred Boeing’s credibility and also increased the significance of rescue plans for getting things right on firm ground both on the commercial and space side.
With the recovery plan, Boeing is now focusing on improving operational efficiency, rebuilding reputation, and creating stability within the workforce.