Boeing's production problems deepened as machinists in the Seattle area rejected a new labour contract that proposed a 35% wage increase over four years, extending their strike beyond five weeks.
The rejection, supported by 64% of the voting union members, has further delayed aircraft production and cost Boeing approximately $1 billion per month, according to S&P Global Ratings.
The strike has come at a particularly difficult time for Boeing, which also reported a $6 billion quarterly loss, the largest since 2020. The company's CEO, Kelly Ortberg, had prioritised resolving the labour dispute to address ongoing issues with safety and production quality.
The new contract, which offered substantial raises, increased 401(k) contributions, a $7,000 bonus, and a commitment to build the next aircraft in the Pacific Northwest, failed to meet union demands. Workers, still upset about losing their pensions in a 2014 deal, sought better compensation, especially amid rising living costs in the Puget Sound area.
Boeing's machinists, who previously voted down a 25% raise, initiated their first strike since 2008 on September 13. The International Association of Machinists and Aerospace Workers (IAM) plans to push for further negotiations.
Meanwhile, the strike has severely impacted Boeing's supply chain, with Spirit AeroSystems announcing the furlough of 700 workers, with potential for further layoffs if the strike continues.
Boeing's challenges extend beyond labour disputes, as safety concerns resurfaced earlier this year following a midair incident involving a Boeing 737 Max 9, prompting renewed scrutiny from regulators.
Source:
NBC News
