Boeing Machinists Reject Contract, Prolonging Strike and Production Halt

Boeing machinists have decisively rejected a proposed labor contract, extending a strike that has already halted much of the company’s aircraft production in the Seattle area for over five weeks. The contract, which offered a 35% wage increase over four years, was turned down by 64% of union members, according to the International Association of Machinists and Aerospace Workers (IAM), as reported by CNBC.

This vote is a major setback for Boeing, which recently announced a $6 billion quarterly loss, its largest since 2020, and signaled cash flow challenges likely to persist until 2025. The ongoing strike is estimated to cost Boeing approximately $1 billion per month, further intensifying the financial strain.

Boeing’s new CEO, Kelly Ortberg, has emphasized that resolving the strike is a key priority, particularly as the company faces safety and quality control issues. “My focus is on getting everyone looking forward, back to work, and improving relationships,” Ortberg stated in an interview with CNBC, expressing a strong desire to restore normal operations.

The strike involves more than 32,000 machinists in the Puget Sound region, Oregon, and other locations, who initially walked off the job on September 13 after turning down a prior proposal that included a 25% wage hike. The union had been seeking a 40% increase, citing rising living costs in the area.

The latest offer included a 35% wage hike, increased 401(k) contributions, a $7,000 bonus, and additional benefits. However, the lack of a pension plan—lost in 2014—remained a significant sticking point for union members.

In an attempt to meet union demands, Boeing committed to producing its next aircraft in the Pacific Northwest, reversing an earlier decision to shift 787 Dreamliner production to a non-union facility in South Carolina. Nonetheless, IAM District 751 President Jon Holden stated at a press conference that the union felt the offer still fell short and expressed readiness to return to the bargaining table.

The strike’s impact stretches beyond Boeing, affecting its extensive supply chain, which remains fragile in the post-pandemic era. Spirit AeroSystems, a key Boeing supplier, has announced plans to furlough roughly 700 employees, with potential layoffs if the strike continues.

This labor dispute adds to Boeing’s recent challenges, including heightened regulatory oversight following a midair incident with the 737 Max 9. As Boeing strives to increase production amid these issues, the resolution of this strike will be crucial to its long-term stability and growth.