Boeing Co. and its largest union have reached a landmark deal that could potentially avoid a strike, which would further cripple the already troubled US aircraft manufacturer. The offer includes a 25% wage increase over four years, a $3,000 bonus, and a commitment to build Boeing's next plane in the Seattle area, according to separate statements from both parties.
The breakthrough followed a marathon bargaining session, with a strike vote looming as the current contract is set to expire at midnight on 12 September. The deal marks a significant victory for new Boeing CEO Kelly Ortberg and his pledge to reset long-contentious labour relations. However, it's still uncertain whether workers will support the agreement, as anti-management sentiment remains strong on the factory floor.
"The contract offer provides the largest-ever general wage increase," said Stephanie Pope, President and CEO of Commercial Airplanes, in a video message to employees. "Equally important, this contract deepens our commitment to the Pacific Northwest," added Pope, who is also Boeing's Chief Operating Officer. "Boeing's roots are here in Washington."
'Tough position'
Boeing and the International Association of Machinists and Aerospace Workers have spent nearly a month in a Seattle hotel, seeking middle ground on issues including wages, retirement benefits, job security, and healthcare. These are the first full-scale negotiations in 16 years between the company and the local union, which represents 33,000 mechanics and factory workers in Washington and Oregon.
Boeing’s wage offer, including "progression"—regular pay increases as workers gain experience—would result in a 33% pay boost. However, this is still short of the 40% raise that union leaders initially sought in March.
"Financially, the company finds itself in a tough position due to many self-inflicted missteps," Jon Holden, president of IAM District 751, and Brandon Bryant, president of District W24, said in a joint statement to members. "It is IAM members who will bring this company back on track."
Credit rating
If workers reject Boeing's offer, the company could face a walkout that would shut down its Puget Sound factories, jeopardising efforts to increase jetliner production. Boeing is already dealing with a cash crisis, having burned through over $8 billion in the first half of the year. A near-catastrophic accident in January involving a 737 exposed major manufacturing flaws, prompting sweeping measures, including a leadership change.
While Boeing aims to maintain fiscal discipline, the costs of a work stoppage would far outweigh those of preserving labour peace. The company’s credit rating is at risk of being downgraded to below investment grade, and production of the 737 remains capped by regulators until Boeing can rectify its manufacturing issues. Boeing hasn't posted an annual profit since 2019.
