Boeing’s more than 32,000 machinists in the Puget Sound area of Washington, in Oregon and in other locations went on strike on Sept. 13.
Boeing machinists rejected a new labor deal that would provide 35% wage rises over four years, their union said on Wednesday, prolonging a more than five-week stoppage that has shut most of the firm’s aircraft manufacturing, which is based in the Seattle.
Another blow for the company is that the contract was rejected by 64% of the voters; the company said earlier on Wednesday that it would remain a cash consumer through 2025 and posted a $6bn Q3 loss, its worst since 2020.
The strike is estimated to be eradicating the company of about $1 billion every month, as was reported by S&P Global Ratings.
New CEO Kelly Ortberg had said that it was important for the company to reach an agreement with the machinists to bring the company back to its feet after years of safety and quality issues.
“My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg said in an interview with CNBC’s “Squawk on the Street” earlier in the day when he was asked about the strike.
Ortberg has outlined his strategy for Boeing that could entail streamlining the firm to its strategic businesses. Earlier this month, he said Boeing plans to reduce its global workforce of 170,000 people by 10%.
Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations went on strike on September 13 after rejecting a previous tentative agreement that offered 25% raises.
The International Association of Machinists and Aerospace Workers union had demanded 40% increase in wages. The machinists’ strike is the first one in the last 3 years, the previous one having taken place in 2008.
The most recent offer made last Saturday was 35% wage increase over four years, higher 401(k) contributions, $7,000 bonus and other enhancements.
Employees had demanded better wages due to a rise in the cost of living in the Puget Sound region.
Previous contract signed in 2014 made some machinists frown because they lost their pension plan but the recent proposal did not include a pension plan.
In the new contract Boeing promised to construct its next plane in the Pacific Northwest, an issue that had angered union employees when Boeing transferred all 787 Dreamliner construction to a non-union factory in South Carolina.
‘We have achieved a lot in this agreement’. But we have not done enough to satisfy our members,” IAM District 751 union president Jon Holden said at the news conference on Wednesday night. He said the union will seek to return to the bargaining table.
Boeing did not respond to the voting results.
The labor relations dispute is the latest in a long list of issues at Boeing beginning earlier this year when a door plug disintegrated mid-flight from a Boeing 737 Max 9, its most popular aircraft, rekindling regulator concern over the firm.
The strike emerged at a time when Boeing was seeking to increase production of the 737 and other planes.
The longer downtime is also an issue for the aerospace supply chain, which is still recovering from the pandemic, as the company’s supply chain partners had to get new employees up to speed.
Spirit AeroSystems last week said it would temporarily furlough about 700 workers and that layoffs or other furloughs are possible if Boeing machinists strike continues.