Boeing workers vote to end 7-week strike, accept new contract with 38% raise - Action News
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Boeing workers vote to end 7-week strike, accept new contract with 38% raise

Boeing'sWest Coast factory workers accepted a new contract offer on Monday, ending a bitter seven-week strike that halted most jet production and deepened a financial crisis at the troubled plane-maker.

About 33,000 machinists havebeen on strike since Sept. 13 demanding steep wage increase

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Members of the International Association of Machinists and Aerospace Workers District 751 embrace at a union hall Monday in Seattle after learning members voted to approve a new contract proposal from Boeing. (David Ryder/Reuters)

Boeing'sWest Coast factory workers accepted a new contract offer on Monday, ending a bitter seven-week strike that halted most jet production and deepened a financial crisis at the troubled planemaker.

The union said members voted 59 per cent in favour of thenew contract, which includes a 38 per centpay rise spread over four years, easing pressure on newBoeingCEO Kelly Ortberg after two previous offers were voted down in recent weeks.

"This is a victory. We can hold our heads high," Jon Holden, the union's lead negotiator, told members after the results were announced. "Now it's our job to get back to work."

However, Boeing refused to meet strikers' demand to restore a company pension plan that was frozen nearly a decade ago.

The end of the first strike in 16 years byBoeing's largest union provides welcome relief for a company that has lurched from one setback to the next since adoor panel blew offa near-new 737 MAX plane in mid-air in January.

In a message toBoeingemployees after the vote, Ortberg said he was pleased the union had ratified a deal.

"While the past few months have been difficult for all of us, we are all part of the same team," he said. "There is much work ahead to return to the excellence that madeBoeingan iconic company."

The interior of an airplane with a door missing and insulation showing around its edges is displayed.
A gaping hole is shown on Alaska Airlines Flight 1282 on Jan. 7, 2024, in Portland, Ore. A panel blew out Jan. 5, shortly after the flight took off from Portland, forcing the plane to return to Portland International Airport. (National Transportation Safety Board/The Associated Press)

Around 33,000 machinists who work on the best-selling 737 MAX jet, as well as the 767 and 777 wide-bodies, havebeen on strikesince Sept. 13, demanding a 40 per centwage increase and the restoration of a defined-benefit pension they lost a decade ago for a 401(k) retirement plan.

Old pension not restored

"I'm ready to get back to work," said David Lemon, a worker in equipment calibration certification in Seattle who voted in favour of the contract.

He calculated that the pay hike and a fourper centbonus the guaranteed minimum annual payout to the reinstated incentive plan amounted to the 40 per centincrease they'd gone after. "We got there," he said.

The old pension will not be restored, but workers received a bump to company matching contributions for their 401(k) plans.

Boeingalso promised to build the next airplane in the Seattle area. "They've never given us a commitment" to a new airplane before launch, Holden said.

U.S. President Joe Biden and acting Labour Secretary Julie Su, who facilitated the contract talks, congratulated workers and the company on the outcome. "We've shown that collective bargaining works," Biden said.

A plane takes off from a runway.
An Alaska Airlines Boeing 737 Max 9 airplane takes off in Seattle on March 1, 2021. (Ted S. Warren/The Associated Press)

Boeingsaid Su was instrumental in moving both sides toward reaching a ratified deal.

Biden has been particularly supportive of unions as president, and the union vote comes the day before Americans go to national polls to pick his successor.

Boeingwill now take weeks to ramp up plane production and boost cash flow, with 737 MAX output expected to languish in the single digits per month for some time, according to two people briefed on the matter, far short of the 38 a month targeted before the strike.

Strike cost $100M US a day

Workers can start returning to building planes from Wednesday, the International Association of Machinists and Aerospace Workers (IAM) said, althoughBoeinghas warned that some people will have to be retrained due to the prolonged period away from the factory floor.

The strike was costingBoeingaround $100 million US a day in lost revenue, analysts said, prompting the plane-maker toraise $24 billion from investorslast week in a bid to preserve its investment-grade credit rating.

Ortberg now needs to reset relations with machinists in the Pacific Northwest who have used the strike to vent anger built up over a decade when wages have lagged inflation and the cost of living in the Seattle area has soared.

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The union said members voted 59 per cent in favour of thenew contract, which includes a 38 per centpay rise spread over four years. (Jason Redmond/AFP/Getty Images)

The unionhas saidits members earned just four one-per-cent-wage increases over the last eight years.

"I'm demoralized to say the least," said 777 worker Thomas Amilowski, who voted against the contract. He said the union leadership, which had backed the offer in the first vote that was resoundingly rejected by nearly 95 per centof members, had a "defeatist mindset."

Holden noted that 59 per cent approval meant "there were those who definitely were not happy with the vote." But he added that workers can rebuild the relationship withBoeingleadership.

Boeinghas said the average annual machinists' pay at the end of the new four-year contract will be $119,309 US, up from $75,608 previously.

The pay increase may add $1.1 billion toBoeing's wage bill over the four years, while a $12,000 ratification bonus for each union member could result in another $396 million in outflows, according to analysts at Jefferies.

More than 26,000 union members voted, putting turnout near 80 per cent.

With files from The Associated Press