Boeing, one of the two significant OEMs for commercial aircraft globally, cannot seem to catch a lucky break. The aeroplane company has been running behind on the 777-9 entry into service and, before this, had the crashes and the subsequent grounding of the 737 MAX aircraft for an extended period. This does not take away from the current issues with the Starliner and the problems at Boeing Defence. However, for them, the biggest issue over the past couple of months has been the strike of the Boeing Machinists to negotiate a new contract for their pay. Fortunately, there is a change now.

Boeing makes an acceptable proposal to the Machinists Union.

Boeing Machinists, represented by the IAM Union District 751, have been striking since September 13, 2024, after the efforts of the negotiations between Boeing and the Union to negotiate a four-year-long pay contract came to nought, and the Union members voted to go on a strike. The union asked for a 40% pay hike over four years.

Boeing’s first offer was a 25% pay hike over four years, which was voted down in favour of a strike. After the strike, Boeing’s first offer was for a 30% pay hike (over four years), then a 35% offer. Boeing also committed that their next new aeroplane would be made in the Puget Sound area of Washington State, where Boeing’s Renton and Everett plants are situated. This commitment directly came at the initiative of Kelly Ortberg, the new CEO of Boeing.

Boeing’s 25% offer got voted down by over 90% of the striking union members. The 35% offer was rejected by over 60% of the striking union members. Arguably, many Boeing machinists were even okay with the 35% pay hike offer and wanted to return to work as soon as possible.

The last offer, which Boeing presented, was a pay hike of 38%, which came with an Ultimatum by the CEO, as per reporting from The Seattle Times. The offer was put to the vote on November 4, 2024, and the Boeing machinists represented by IAM Union District 751 voted to approve the new contract, with 59% of participants voting in favour of the proposal.

#IAM751Machinists pic.twitter.com/VfgWRvtjJ6

— IAM Union District 751 (@IAM751) November 5, 2024

The contract that was offered and approved has the following key points:

• A 38% pay increase, in the form of a 13% increase in the first year, a 9% increase in the second and third years, and a 7% increase in the fourth year, which compounds to a total of 43.65% over the life of the agreement.
• A USD 7,000 ratification bonus plus a USD 5,000 lump sum payment, for a total of USD 12,000, which they can choose to split between a one-time ex-gratia or a contribution to their 401k plans.

Machinists can start returning to work on Wednesday, November 6, 2024, and no later than November 12, 2024.

Ultimately, this strike caused Boeing a massive loss and almost had them downgraded to junk status on their bond ratings before they sold shares to shore up their capital by USD 23.5 Billion in late October 2024 to stave that off.

On the occasion, Kelly Ortberg, Boeing’s President and CEO, made a statement,

We were pleased to reach a ratified agreement with IAM 751 & W24 tonight.

While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company.

This is an important time in our history, and like generations before us, we will face into the moment together, and stronger as one team.

Boeing customers must also be breathing a sigh of relief. The 737 MAX is one of the two narrowbody aircraft families of choice, and customers have been waiting with bated breath for the strike to end so that they can resume inducting new aircraft and growing their business.

Bottomline

Boeing’s machinists have voted to approve a new contract that gives them a 38% pay hike over four years, which is pretty close to the initial ask by the machinists. The strike started on September 13, 2024, and finally ended on November 4, 2024. The machinists will begin work between November 6 and 12, 2024, which would mean that The Boeing Company can return to delivering the 737 MAX jets to customers around the globe.

What do you think of the Boeing strike coming to an end?

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