Boeing workers end strike after 38% pay hike approved

After seven weeks of disruptive industrial action, Boeing workers have voted to accept a new contract, bringing an end to the strike that has significantly affected the company’s production and financial stability.

The International Association of Machinists and Aerospace Workers (IAM) announced that 59% of its members voted in favor of the new deal, which includes a substantial 38% pay increase over the next four years.

The strike, which began on September 13, involved around 33,000 machinists and halted much of Boeing's jet production, exacerbating the company’s financial troubles.

Boeing faced an estimated $100 million in lost revenue per day during the walkout and had already reported substantial operating losses in its commercial aircraft business.

In addition to the pay hike, the new contract includes a $12,000 one-time ratification bonus for each worker, as well as enhancements to the company’s 401(k) retirement plans.

While the workers did not win the return of their defined-benefit pension, which they had lost in a previous contract change, the company has agreed to increase its matching contributions to workers’ retirement savings.

Boeing’s CEO Kelly Ortberg expressed relief at the outcome, acknowledging the difficulties both the company and its employees had faced. "While the past few months have been difficult for all of us, we are all part of the same team," Ortberg said in a statement.

The company is now focused on ramping up production, particularly of its high-demand 737 MAX, though output is expected to remain far below target for the next several months as workers gradually return to the factory floor.

The strike had been driven by frustrations over wage stagnation and the rising cost of living in the Seattle area. Workers had previously rejected two offers from Boeing, demanding a 40% pay increase and the restoration of the pension.

The agreement reached on Monday falls short of their original demands but provides significant improvements to their compensation and benefits.

Union leaders hailed the deal as a victory. "Through this victory and the strike that made it possible, IAM members have taken a stand for respect and fair wages," said Jon Holden, IAM’s lead negotiator.

While many workers supported the new deal, some expressed dissatisfaction, including those who had voted against the contract. "I’m demoralized to say the least," said Thomas Amilowski, a worker who opposed the agreement. "The leadership’s mindset was defeatist."

The strike had drawn attention from the White House, with Acting US Labor Secretary Julie Su visiting Seattle to facilitate negotiations.

President Joe Biden also voiced support for the workers, stating that the outcome showed the power of collective bargaining.

Despite the end of the strike, Boeing faces a long road ahead to recover from the disruptions. The company recently raised $24 billion from investors to bolster its finances and avoid a downgrade of its credit rating.

However, the strike has intensified the challenges facing the plane maker, which has been grappling with multiple setbacks, including a mid-air incident involving one of its 737 MAX planes earlier this year and delays with its Starliner space program.

Boeing workers are expected to begin returning to their posts as early as Wednesday, with full production ramping up in the coming weeks.

However, with many workers having been absent for over a month, some will require retraining to bring their skills back up to speed.

As Boeing works to rebuild relationships with its workforce, the company’s future depends on how well it can regain its footing in the highly competitive aerospace industry.