Boeing agrees deal with union members to end strike action 

End of lengthy labour dispute will come as a relief to airlines around the world, including Ryanair, whose orders have been delayed

Boeing workers have been on strike since September 13 over pay further impacting the already struggling airplane-manufacturer. (AP Photo/Lindsey Wasson)

Airplane-maker Boeing has reached a tentative agreement with striking union members to end a lengthy labour dispute which will come as a relief to numerous airlines around the world, including Ryanair, whose orders have been delayed.

The company’s latest proposal would boost wages by 38% over four years and give workers a $12,000 (€11,042) signing bonus if it’s approved, the International Association of Machinists and Aerospace Workers (IAM) said in a statement.

IAM District 751 urged its members to accept the Boeing offer and end the strike, warning they risked losing gains they’ve made after weeks of collective bargaining. The union plans to hold a vote on the proposal on November 4.

“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labour,” the union said.

“We are at that point now and risk a regressive or lesser offer in the future.” 

Boeing shares rose 2.2% before trading opened on Friday. The stock had plunged 43% so far this year through the close of Thursday’s session.

Labour strike

The latest attempt to end the labour strife comes after 64% of members of IAM District 751 voted to reject Boeing’s third contract offer, which would’ve hiked wages by 35% over four years.

Ratification would represent a critical win for Boeing’s new chief executive Kelly Ortberg, clearing the way to move forward with plans to rebuild Boeing’s culture and improve the quality of work in its factories.

On Monday, the company shored up its balance sheet by raising $21 billion in capital to fund its recovery. Now, Ms Ortberg’s team and union negotiators have made progress toward breaking the deadlock with assistance from acting US Labor Secretary Julie Su, who’s played a role in ending other strikes.

Ms Su commended the machinists and Boeing’s leadership teams for striking a tentative deal that paved the way for a fresh vote. “I always say that collective bargaining works and there are few better examples of this than workers demanding and getting unprecedented gains,” she said in a statement.

The work stoppage by Boeing’s largest union is approaching the two-month mark, squeezing the planemaker’s suppliers, and rippling through the US economy.

Max out

Production of the cash-cow 737 Max and other jetliners has been shut down since workers walked off the job on September 13, idling Boeing’s IAM-represented plants across the West Coast. Instead of generating cash in the fourth quarter, the company now expects to burn through around $4bn, which would bring total outflows for the year to $14bn.

The IAM strike is driven by resentment over the terms of a controversial 2014 agreement that curbed pay and eliminated pensions for new employees at a time when senior executives were richly rewarded.

The latest offer doesn’t reinstate the machinists’ defined benefit pension plans, a key demand for older workers. But it helps workers build their retirement savings and recoup losses from the years when their wage increases didn’t keep pace with inflation.

Bloomberg