Striking Boeing workers have overwhelmingly rejected a new pay offer from the aerospace giant, which proposed a 35% pay increase over four years. According to the International Association of Machinists and Aerospace Workers (IAM) union, 64% of its members voted against the deal.
The strike, which began on September 13, has seen more than 30,000 Boeing employees walk off the job after an initial offer was also turned down. The ongoing work stoppage reflects deep-seated frustrations among workers regarding pay and working conditions, which union representatives described as a consequence of “mistreatment” by the company over the years.
In a statement, the IAM emphasized the importance of worker rights, calling the vote “workplace democracy” and indicating a clear message to the company regarding its treatment of employees. Boeing has not commented on the rejection of the latest offer.
This rejection marks the second time in a month that workers have turned down a proposed deal. In the previous vote, 95% of workers opposed the initial offer, showcasing widespread discontent among the workforce.
Boeing’s new CEO, Kelly Ortberg, who assumed the role in August, warned that the company is at a “crossroads” as it grapples with mounting financial losses, which have surged to approximately $6 billion (£4.6 billion). Ortberg noted that despite ten years of sacrifices by employees, there remains significant ground to cover, and he expressed hope for resumed negotiations.
“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” Ortberg stated, emphasizing the need for stabilizing the company after its reputation has been marred by various manufacturing and safety concerns. The latest crisis began in January when a significant piece of one of its passenger planes experienced a mid-air blowout.
The strike has exacerbated Boeing’s challenges, leading to a notable slowdown in production. Ortberg indicated that the company is currently “saddled with too much debt” and has disappointed customers due to lapses in performance across its business sectors. The commercial aircraft division reported an operating loss of $4 billion in the past three months, while the defense unit incurred nearly $2.4 billion in losses.
The ongoing strike has significant financial implications for Boeing, costing the company an estimated $100 million per day. Industry expert Anna McDonald from Aubrey Capital Management highlighted the severity of the situation, noting the “significant” cash burn the company is facing.
Despite these challenges, Ortberg assured investors that Boeing has a strong backlog of approximately 5,400 aircraft orders. However, he cautioned that restarting production will be complex, stating, “It’s much harder to turn this on than it is to turn it off.”
As part of its cost-cutting measures, Boeing announced plans earlier this month to reduce its workforce by about 10%. Additionally, thousands of staff are currently on a rolling furlough due to the strike, which is also impacting suppliers. Spirit AeroSystems, a key Boeing supplier, has already implemented a 21-day furlough for 700 workers and warned of potential layoffs if the strike persists.
Ortberg emphasized his commitment to changing Boeing’s corporate culture, stating that the company must address underlying issues to prevent future disputes and improve collaboration among employees.
