Boeing and union are “really far apart” weeks before a possible strike
Boeing and its largest union continue to disagree on key points in the wage negotiations. At the same time, a strike is looming that could paralyze production of the cash cow 737 Max aircraft next month.
On wages, job security and other issues, the two sides’ views are “really far apart,” says Jon Holden, district chairman of the International Association of Machinists and Aerospace Workers, which represents about 33,000 Boeing workers.
“It’s a tough fight,” Holden said in an interview. “We’re very aggressive in our proposals on wages, pensions, health care, job security and paid leave. We’re not as far along on the big issues.”
Negotiators for the plane maker and IAM District 751 are holed up in a Seattle hotel to hammer out their first comprehensive contract in 16 years before the current one expires at midnight local time on Sept. 12. Without a new agreement, Boeing faces a strike that could lead to the closure of its Puget Sound factories, jeopardizing efforts to increase production of passenger planes after a near-disaster revealed lax quality controls and production shortfalls.
Holden’s team wants Boeing to commit to building its next plane in the Seattle area and is demanding a 40% wage increase over three years. The union is also pushing for more say in safety and quality. It is encouraged by a resurgent U.S. labor movement, a shortage of skilled aircraft mechanics and pressure on Boeing to stabilize work at its factories. There have been “slight” improvements in the company’s offers on wages in recent weeks, but more is needed, Holden said.
“We continue to negotiate in good faith and are focused on the issues that matter to our employees and their families,” Boeing said in an emailed statement. “We are confident we can reach an agreement that balances the needs of our employees and the business realities we face as a company.”
Boeing machinists voted overwhelmingly to strike last month, drawing 25,000 workers and their families to a rally at Seattle’s T-Mobile Park. Since then, factory work across the region has been interrupted daily by loud marches punctuated by chants and honking of horns in a show of union solidarity.
On September 12, union members are scheduled to vote on the company’s best and final offer. If the offer is rejected, workers will vote on whether to strike. If two-thirds of the vote supports a strike, they will picket at 12:01 a.m. on September 13.
Restoring a steady pace of production is key to reversing Boeing’s cash burn, which has consumed more than $8 billion so far this year. Kelly Ortberg, Boeing’s new chief executive, has tried to strike a conciliatory tone with machinists since joining the company on Aug. 8. He announced plans to work from Seattle and, during a brief meeting with Holden, emphasized his desire to improve relations with the union that represents workers in Seattle and Portland, Oregon.
“They are both good leaders,” said Richard Aboulafia, managing director of the consulting firm AeroDynamic Advisory. “Given the measures being called for here, one can only hope that two good leaders will find the necessary common ground to prevent the strike.”
In a video update on the talks on August 23, Kim Pastega, a member of Boeing’s negotiating team, said the company was “100 percent committed” to reaching an agreement that would be beneficial for both workers and the future of the company.
“We are really making progress and having productive and cooperative discussions with the union,” said Pastega, vice president of manufacturing and safety for Boeing’s commercial aircraft division.
In the interview, Holden said he had not noticed a change in the tone at the negotiating table since the new CEO succeeded Dave Calhoun, who announced his resignation in March amid a major restructuring.
“I think they’re in charge now,” Holden said of Ortberg. “I don’t know how involved he is. But I know he’s keeping an eye on everything — at least that’s what I’ve been told.”
The Machinists have a decades-long history of activism, including a 2008 strike that shut down Boeing’s plane production for two months. Leaders are still soured over a 2014 deal that included pension cuts, minimal pay raises and tied the activists’ hands for a decade – in exchange for Boeing’s pledge to build the 777X jet in the region.
“Even though we are still a long way from that, I have not given up,” Holden said. “Over 33,000 families and their livelihoods are at stake. I want to reach an agreement. But we are ready to strike.”