Machinists union rejects Boeing contract offer, extending strike
The union representing 33,000 striking machinists at Boeing rejected the company's latest contract offer Wednesday evening, extending a strike that has strained aircraft production.
The International Association of Machinists and Aerospace Workers (IAM) has been on strike since Sept. 13 as they try to extract more concessions from Boeing in their next labor contract. Earlier this month, the IAM said Boeing offered a 35% wage hike over four years, a new incentive plan and a $7,000 ratification bonus, as well as improved retirement perks.
Late Wednesday night, the IAM's ratification vote failed as 64% of its members voted against agreeing to the contract. With the strike set to continue until a deal is reached, assembly lines at Boeing's West Coast facilities are nearly all idled, including production of its best-selling 737 Max, 767, 777/777X, P-8, KC-46A Tanker and E-7 Wedgetail.
"We have made tremendous gains in this agreement in many areas our members said were important to them. However, we have not achieved enough to meet our members' demands," IAM District 751 President Jon Holden said in remarks announcing the vote result.
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"This membership will continue to stand on the line, picketing for the contract they deserve. There is much more to do, and we will work to get back to the bargaining table," he added.
Boeing told FOX Business, "We are disappointed in the vote result."
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Boeing said earlier this month that it will lay off 10% of its workforce, about 17,000 employees, to address financial challenges. The company has sought to shore up its finances by pursuing $35 billion in equity and debt financing.
Boeing CEO Kelly Ortberg said Wednesday in prepared remarks ahead of the company's quarterly earnings call that ending the IAM strike is the company's first and foremost priority, and that it is "feverishly working to find a solution" that works for the company and its employees.
He also noted that "restarting the factories and the supply chain" is "much harder to turn this on than it is to turn it off. So it's critical, absolutely critical, that we do this right. Our Safety and Quality Management Systems will guide us through the restart, and we have a detailed return-to-work plan in place and I'm really looking forward to getting everybody back and getting to work on that plan."
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The Labor Department said Thursday that Acting Labor Secretary Julie Su is in contact with Boeing and the IAM following the union's rejection of the company's latest contract offer. Su met with the IAM and Boeing in Seattle last week in an effort to support the negotiations.
"Both parties will need to determine the best way forward," a Labor Department spokesperson said, adding that Su "is available to support them," according to a Reuters report.
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Reuters contributed to this report.