Boeing Machinists Accept 38% Pay Rise to End Seven-Week Strike

Striking Boeing machinists on Monday voted to accept the company’s latest proposal of a 38% pay rise putting an end to the Boeing workers strike which has proved to be the  costliest strike in the United States in more than 25 years.

Boeing workers had been on strike since September, grounding the embattled company’s production at its assembly plant in the Seattle region. This contributed to a loss of $6.2 billion reported by the company in its Q3 financial results.

Boeing’s Earlier Offers

Boeing had initially made a proposal of a 25% pay rise over four years to the striking workers which was rejected flat. The company subsequently made an improved offer in September which it described as its “best and final” offer.

The offer would have given workers a 30 percent raise and restore a performance bonus but it also feel flat. Boeing proceeded to make a  proposal had included a 35 percent wage rise over four years but did not restore a defined pension plan sought by many employees, which was also rejected by the striking workers.

Boeing’s Accepted Offer

Boeing’s accepted deal calls for an immediate raise of 13% and raises of 9% for each of the next two years, and then another 7% in the fourth and final year of the contract. Taken together, members will receive a pay raise that exceeds 43%.

Workers also get a ratification bonus of $12,000, part of which they can contribute to 401(k) retirement accounts. But the deal did not restore the traditional pension plan they lost in 2014 from their previous labor deal.

The International Association of Machinists (IAM) which represented the 33,000 striking workers said rank-and-file members voted by 59% to approve the deal. It would be recalled that the union’s members had voted almost unanimously against Boeing’s first offer on the eve of the start of the strike, and then 64% voted against the second offer less than two weeks ago, extending the strike.

Speaking on the Accepted deal, Jon Holden, president of the largest IAM local at Boeing and the union’s chief negotiator stated.

“I’m proud of our members. It is a win.

“They achieved a lot, and we’re ready to move forward.”

The union’s leadership had urged its members to accept the latest offer, even though it was not significantly different from the third offer they rejected in October. The union had urged members “to lock in these gains and confidently declare victory,”  warning members that another rejection could “risk a regressive or lesser offer in the future.”.

What This Means For Boeing

According to estimates from Anderson Economic Group, a Michigan-based research firm,  Boeing’s losses through the end of last week was $6.5 billion.

This is in addition to the nearly $40 billion in core operating losses that Boeing has reported since two fatal crashes led to a 20-month grounding of its best-selling jet, the 737 Max, in 2019 and 2020.

The company is therefore in dire need to get up and running again and try to meet up with its backlog of undelivered aircrafts.

Echoing these sentiments Boeing CEO, Kelly Ortberg said in a statement ““While the past few months have been difficult for all of us, we are all part of the same team.

 “We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company.”

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