Boeing machinists vote on new contract: NPR

Terry Muriekes, a tool warehouse worker at the Boeing factory in Everett, Washington for 38 years, holds a sign during a strike rally last week.

Jason Redmond/AFP via Getty Images

Hide caption

Toggle label

Jason Redmond/AFP via Getty Images

SEATTLE — Boeing's machinists' union overwhelmingly rejected the company's first contract offer more than five weeks ago.

Now there is a better offer on the table. And this time the vote could be much closer.

“Our members have been able to make a big difference to Boeing,” said Jon Holden, president of the International Association of Machinists and Aerospace Workers District 751.

But even Holden isn't sure how its 33,000 members will vote on Wednesday.

“I don’t know,” Holden said in an interview. “I know there are a lot of emotions out there. There’s still a lot of trouble.”

What seems certain is that Boeing's problems will outlast the strike, whenever it ends. The company has been losing more than $1 billion a month as the strike brought production to a halt at its factories in the Pacific Northwest.

Even before the strike, Boeing was struggling with production and quality control problems that limited production of its best-selling 737 line. New CEO Kelly Ortberg has announced plans to lay off about 10% of her workforce.

“Recovering our business requires difficult decisions and we must make structural changes to ensure we remain competitive,” Ortberg said in a memo to employees earlier this month.

Boeing declined to make Ortberg available for an interview. He has kept a low profile since taking over as CEO of Boeing in August. Ortberg is expected to speak publicly for the first time on Wednesday morning during an earnings conference call. The company has already announced that it will post a loss of at least $5 billion in the third quarter alone.

People chant during an International Association of Machinists and Aerospace Workers (IAM) strike rally at the Seattle Union Hall in Seattle, Washington, October 15, 2024.

Jason Redmond/AFP via Getty Images

Hide caption

Toggle label

Jason Redmond/AFP via Getty Images

Ortberg takes over at a crucial moment for Boeing. The head of Emirates, a major Boeing customer, said this month that the plane maker was facing a credit downgrade and “bankruptcy is imminent.”

Boeing quickly announced that it plans to raise billions of dollars to replenish its cash flow – including up to $25 billion through the sale of shares and other securities and another $10 billion through a new credit line.

Other observers say Boeing's problems aren't all that bad. At least not yet.

“I don’t think bankruptcy is inevitable,” said Kevin Michaels, managing director of AeroDynamic Advisory, an industry consulting firm. “It's a possibility. The probability is higher today than it was six months or a year ago. But I don’t think it’s inevitable.”

Michaels worked closely with Boeing's CEO in the 1990s when both worked at Rockwell Collins. And Michaels believes Ortberg's strategy of downsizing the company is fundamentally correct.

“Boeing is a bloated mess,” Michaels said. “They are very top-heavy. And that slows down their decision-making.”

In the long term, Michaels believes Boeing can still turn things around, especially if it can sell assets that aren't performing well.

For now, the focus is on Boeing's latest proposal to its striking machinists. The machinists' union credits acting U.S. Labor Secretary Julie Su with helping restart stalled negotiations.

The company is offering a 35% wage increase – a significant increase from the original offer of 25%, but still below the union's desired 40% increase. The company would also increase its contributions to employees' 401k retirement funds.

But there is one key union demand that Boeing has not given in to: the pension plan.

Jon Holden, president of IAM District 751, shakes hands with Kat Kinckiner, a 15-year Boeing tool shop employee, during a strike rally in Seattle, Washington.

Jason Redmond/AFP via Getty Images

Hide caption

Toggle label

Jason Redmond/AFP via Getty Images

“When we lost our pensions, I cried,” said Kat Kinckiner, a union representative at the Renton, Washington, plant where Boeing assembles the 737. “That was my future.” And to see something just taken like that was just devastating.”

At the rally in Seattle last week, Kinckiner and other union members made it clear they want to reinstate the pension plan they lost a decade ago.

“I remember at the time we all said: We won’t accept the next contract,” she said. “That won't happen again. Not for us. Not like that.”

Jon Holden, president of IAM 751, says he understands why some of his members are still angry and why some are still fighting to get the pension plan back.

“These wounds don’t heal easily,” he said. “But now, ten years later, it’s not easy to get something like that back.”

Union leadership is making no recommendation on how members should vote on this offer. That's a notable difference from the previous vote in September, when the union recommended approval – only to be sharply criticized by some members.

“We believe it is our responsibility to put this before members so they can make that decision,” Holden said. “I hope they think about it, but it’s up to them.”

KUOW's Casey Martin reported from Seattle and Joel Rose reported from Washington, DC