Workers of Boeing represented by the International Association of Machinists and Aerospace Workers, IAM rejected their latest offer on a contract with a 35% pay hike in four years. The proposed deal included a $7,000 ratification bonus, higher contributions toward retirement funds, and reinstating all incentive pay. Still, 64% rejected it. This has marked the second time that members have rejected a proposed deal since the September 13 strike started.
There are more than 30,000 Boeing employees on a walkout, mainly in Washington state, demanding further improvements with a pay increase of 40% and the defined benefit pension, which is excluded from the latest offer. The work stoppage has severely impacted Boeing’s operations as most aircraft models-the 737 MAX, 767, and 777-are not going to be produced during this period.
It is financially very stressful because we do lose $6 billion in the case and are fighting supply chain issues that were already challenging, made worse by the impact of the strike on our production,” agrees Kelly Ortberg, CEO of Boeing. The company has already downsized 10 percent of its employees and placed thousands more into layoff. The strike is estimated to cost Boeing around $100 million a day, putting pressure on already squeezed finances.
While Boeing is likely to have its wish fulfilled with this offer, there are still doubts over how soon negotiations will actually move forward. Even suppliers, such as Spirit AeroSystems, may feel the pinch – the company has announced already that it would have to furlough some employees because of the disruption.