Boeing, union reach tentative deal to end strike

Market: Metals
19/10/24

Aerospace manufacturer Boeing and union leadership negotiating on behalf of more than 32,000 of the company's machinists reached a tentative labor agreement Saturday that, if approved, would end a five-week strike that has halted production of several aircraft programs.

Factory workers backed by the International Association of Machinists and Aerospace Workers (IAMAW) will decide on 23 October whether to ratify the new contract, Boeing and the union said. Only a simple majority — 50pc plus one — will be needed to determine the outcome of the vote.

The new deal includes a general wage increase (GWI) of 35pc spread over four years and a ratification bonus of $7,000, both up from 25pc and $3,000, respectively, from Boeing's initial offer from 8 September. The company also would bring back its incentive plan and increase employee retirement benefits.

It remains to be seen whether workers will approve the agreement after overwhelmingly rejecting Boeing's first proposal, which included a 25pc GWI, by a vote of 95pc. Union leadership urged consideration of the offer, saying "it warrants presenting" to members. Boeing said it looked forward to its employees voting on the negotiated proposal.

The work stoppage, which began 13 September, has paused output of Boeing's flagship 737 Max aircraft, along with its 767 and 777 programs. The company announced it would be laying off 10pc of its workforce and would delay first deliveries of its new 777-9 commercial jet — part of its new 777X widebody family — as a result of the strike and other operational challenges.

Recent estimates from Anderson Economic Group put Boeing's losses at $4.5bn over the course of the strike. Costs to the company's suppliers were estimated at nearly $1.8bn in the same time frame.

Spirit Aerosystems, which Boeing is in the process of reacquiring, said on Friday that beginning 28 October it planned to start furloughing 700 employees who work on the 767 and 777 programs. Spirit produces shipsets for those aircraft and no longer has storage capacity to warehouse new production, having built up "significant inventory" because of the strike.

By Alex Nicoll

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