On Saturday, October 19, the International Association of Machinists and Aerospace Workers (IAM) announced to its 33,000 striking members that they have reached a temporary agreement with Boeing.
The agreement still needs the approval of a majority of IAM’s regular members to take effect, allowing workers to return to their job positions. The union is set to conduct a vote next Wednesday.
The previous tentative agreement was almost unanimously rejected by the union’s regular members, leading to Boeing’s first major strike in 16 years.
The union stated that the new proposal includes a 35% raise in wages over the four-year contract period and further increases in the company’s contributions to members’ 401(k) plans, but it will not reinstate the traditional pension plan discontinued ten years ago.
The previously rejected proposal aimed at a 25% wage increase over the contract period, with smaller improvements in 401(k) contributions and only offering a $3,000 signing bonus. The current proposal includes a $7,000 signing bonus.
The union has been seeking a 40% wage increase and the restoration of defined benefit retirement benefits. Boeing claims that the current agreement is the best and final proposal.
The union credits Acting Secretary of Labor Julie Su for facilitating the deal between the union and management. Earlier this month, Su also negotiated with the International Longshoremen’s Association to end strikes at dozens of ports along the East Coast and Gulf of Mexico, which lasted for three days.
Boeing, being the largest exporter in the United States, is estimated to contribute $79 billion to the economy annually and directly and indirectly support 1.6 million jobs across 10,000 suppliers in 50 states. The strike comes just a month after the new CEO, Kelly Ortberg, took office, expressing his desire to “reset” the troubled relationship between the union and the company.
The strike poses a significant blow to Boeing, which was already facing challenges. According to Standard & Poor’s estimates, Boeing incurs losses of around $1 billion per month due to the strike, not including other financial setbacks. The company announced plans to cut 10% of its global workforce, totaling 171,000 employees. As a result of the strike, Boeing nearly halted production of all commercial aircraft, with the company receiving most of the aircraft sales payments upon delivery.
Reuters reported that labor disputes are expected to have a negative impact on the job report for October, which will be released just days before the presidential election on November 5.