Workers at Boeing’s West Coast factories in the United States will go on strike on Thursday after 96% of voters approved the walkout. The strike will halt production of the company’s best-selling aircraft, adding to its challenges with ongoing delays and growing debt.
The workforce will begin its first strike since 2008 on Friday at midnight Pacific time (0700 GMT). This comes just weeks after the company hired Kelly Ortberg as CEO in August to restore confidence following a January mid-air explosion of a nearly new 737 MAX aircraft caused by a door panel blowing off.
Around 30,000 employees in the Seattle and Portland areas voted on their first full contract in sixteen years. They are responsible for producing Boeing’s 737 MAX and other aircraft.
Members of the International Association of Machinists and Aerospace Workers (IAM) voted 94.6% against the agreement. They also voted 96% in favor of going on strike.
Heading the discussions for IAM, Boeing’s largest union, Jon Holden stated, “This is about respect, this is about addressing the past, and this is about fighting for our future,” prior to revealing the outcome of the vote.
He declared, “We strike at midnight,” to applause and cries of “Strike! Strike! Strike!” from the union hall’s participants.
Boeing did not respond immediately to a request for comment.
The agreement includes a $3,000 signing bonus and a 25% overall wage increase. It also promises to manufacture Boeing’s next commercial jet in the Seattle region, as long as the program begins within the four-year contract period.
The IAM leadership recommended last Sunday that its members approve the deal. However, many employees reacted angrily, defending the initially requested 40% wage increase and bemoaning the loss of an annual bonus.
Holden told reporters, “We’re going to get back to the table as quickly as we can,” but he did not specify when or for how long he anticipated the strike to last. “This is something that we take one day at a time, one week at a time.”
Workers at Boeing facilities in the Seattle region, which construct the company’s MAX, 777, and 767 aircraft, have been staging protests throughout this week.
Boeing’s shares have dropped 36% this year, driven by concerns over safety, production, and a $60 billion debt load. However, the stock closed 0.9% higher on Thursday before the voting results were announced.
It’s unclear how long the walkout will last. A lengthy strike would be detrimental to Boeing’s finances as well as those of the airlines who use its aircraft and the suppliers that provide parts and components for it.
According to a pre-vote report from TD Cowen, a 50-day strike could cost Boeing an estimated $3 billion to $3.5 billion of cash flow.
The 2008 Boeing workers’ strike caused 52 days of factory closures and an estimated $100 million in daily revenue losses.
A lengthy strike might hinder the planemaker’s overall grade and delay its recovery, according to S&P Global Ratings. Boeing is rated one notch over junk status by S&P and Moody’s.
The White House did not immediately respond to a request for comment.
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