Boeing Union Goes on Strike, Halting 737 Production

Boeing’s biggest labor union went on strike, halting production of its bestselling jets and dealing the latest blow to the struggling aerospace giant.

Thousands of machinists who built Boeing’s 737, 777, and 767 jets left the job shortly after midnight Pacific time Friday after rejecting a labor deal between the union’s leaders and Boeing’s executives. The contract offered 25% wage increases over four years.

Union leaders of the 33,000-member International Association of Machinists and Aerospace Workers chapter said about 94% of their members voted to reject the contract, and 96% voted to go on strike. The officials said they would seek to return to the negotiating table with the company.

Boeing’s finance chief, Brian West, told an investor conference Friday that the company is working on a new contract offer to address the union’s concerns. He said the strike would “jeopardize our recovery,” adding that the company is now conserving as much cash as possible.

CEO Kelly Ortberg walked the factory floor the past week, listening to employee feedback. “Kelly is personally engaged and focused on restoring trust with our people and the union. And that’s a priority—resetting that relationship,” West said.

The strike will deal a financial blow to Boeing, which is bleeding cash and piling up debt following January’s Alaska Airlines accident, in which a door plug blew off a 737 MAX jetliner in midair. A prolonged stoppage threatens to strain the industry’s supply chain further and exacerbate airline jet shortages. Boeing shares fell roughly 2% in afternoon trading.

“We believe we are not asking for more than we deserve,” said Marcus Amador, moments after he and other workers walked off the job at the Renton, Wash., factory where Boeing builds the 737. He shouted over chanting strikers, supporters, and honking cars. “It’s been 16 years,” said Amador, referring to the time since the last labor deal. Amador, a quality inspector, said he had worked at the company for 13 years.

Boeing workers had earlier voiced various concerns Thursday as they streamed into local union halls to cast their ballots. Several said the proposed wage increases were too little after a decade of stagnating pay and the rising cost of living in the Pacific Northwest.

One employee noted that the proposed starting wage under the new contract—$21 an hour—was similar to the starting salaries at a local burger chain, Dick’s Drive-In, which offers free employee health insurance and 401(k) matching. “You can make more money flipping burgers,” he said.

The Boeing union’s members had never rejected a contract recommended by its leaders. Their last labor deal was in 2008. Those negotiations led to a 57-day strike that stymied production and cost Boeing an estimated $100 million a day.

Unions scored significant gains last year, thanks partly to strikes in the auto industry and among Hollywood writers and actors. Overall, the U.S. 2023 experienced strikes involving around 540,000 workers, more than double the number of workers involved in the previous year, according to a tally maintained at Cornell University’s School of Industrial and Labor Relations.

Union leaders had reached a deal with Boeing on Sunday following weeks of tense negotiations.

Along with the pay increases, the contract would bolster retirement benefits, lower healthcare costs, and commit Boeing to building its next plane in the unionized Pacific Northwest, a crucial union demand.

The deal fell short of what the union had said was a hard line, including a 40% pay increase over four years.

“While there were many important things that were in this offer, it did not bridge the gap for 16 years and going through two extensions, the threats of job loss, stagnant wages, the cost shift on healthcare and many other issues,” Jon Holden, president of the IAM chapter, said after announcing the vote tally.

Holden said the union canvass its members to ascertain their priorities to reach a deal that can win ratification.

Under the rejected deal, workers’ base pay rate would have increased 11% this year, bringing the minimum hourly rate for workers to between $20 and $37, depending on their position. It called for raises of 4% next year, 4% in 2026, and 6% in 2027. Boeing said average wages would increase 33% over four years because of seniority increases.

After going on a strike for about six weeks, the United Auto Workers reached a deal with Detroit automakers last year to raise pay by 25% over 4½ years.

A year after the 2008 union contract, Boeing established a factory in South Carolina as an alternative to the Seattle area’s heavily unionized plants. It now builds the wide-body 787 Dreamliner there with nonunion labor.

In 2011 and 2014, the union agreed to contract extensions under the threat of losing more work to lower-cost work sites. Workers made concessions on wages and benefits, including replacing pensions with a defined contribution plan.