Boeing Faces Potential Strike on September 13 as Labor Union Seeks Higher Wages and Benefits

Boeing’s largest labor union, the International Association of Machinists (IAM), is threatening to strike on September 13, following months of contentious negotiations with the aerospace manufacturing giant over higher wages. Talks between the union and Boeing, which began last March, have failed to reach an agreement, raising concerns about significant disruptions to Boeing’s production goals.

IAM, which represents over 30,000 Boeing employees, has set forth key demands, including a 40% increase in wages over a three-year period, changes to retirement contributions and healthcare plans, and a commitment to keeping production in the Pacific Northwest. Many of the employees represented by IAM are based in the Greater Seattle Area. A strike could severely impact Boeing’s objective to produce 38 of its 737 aircraft per month by the end of the year, especially amid financial challenges, safety and quality issues, and more stringent Federal Aviation Administration (FAA) requirements.

Historically, IAM has used strikes as a bargaining tool against Boeing. During a previous strike in 2008, the union demanded that the upcoming 787 Dreamliner program remain in Washington, resulting in a 57-day standoff that ended with a 15% wage increase and a renegotiated bonus structure. However, Boeing’s decision on October 1, 2020, to move 787 Dreamliner production to South Carolina in 2021 was met with significant criticism. Washington Governor Jay Inslee condemned the decision, calling it an “insult” to the state’s aerospace workers.

The 2008 strike resulted in a financial loss of approximately $2.5 billion for Boeing, equivalent to about $3 billion today when adjusted for inflation. Since 2019, the company has suffered cumulative losses of around $32 billion, exacerbated by a backlog of 5,600 commercial jet orders valued at approximately $529 billion.

Adding to Boeing’s troubles, its stock has fallen by 6.2% since Tuesday, September 3, after Wells Fargo analyst Matthew Akers downgraded the company’s stock valuation, citing concerns over free cash flow. Boeing is currently producing commercial aircraft at about 25% of its pre-2020 rate, having reported its worst performance in three decades that year. Although production rates for 2024 were still down in the first two fiscal quarters, there was an improvement in the production of the 737 MAX starting in July.

The reduction in Boeing’s commercial aircraft output is largely attributed to an increased focus on safety and quality, driven by scrutiny from the FAA and shareholders. In May, the FAA slowed down deliveries of the 787 Dreamliner due to quality concerns after a mid-flight technical issue resulted in injuries to 50 passengers. Additionally, the 737 MAX 9 aircraft were temporarily grounded after a 60-pound door plug detached mid-flight.

These actions by the FAA are reminiscent of the March 2019 grounding of all Boeing 737-MAX aircraft following the crash of Ethiopian Airlines Flight 302, a 737-MAX 8, which went down six minutes after takeoff, killing all 157 people on board. Just months earlier, in October 2018, Lion Air Flight 610, also a 737-MAX 8, crashed into the Java Sea shortly after takeoff, resulting in 189 fatalities. Both aircraft were relatively new at the time of their crashes.

Despite these incidents, a study by the Lynnwood Times, which analyzed National Transportation Safety Board (NTSB) incident records from 2014 through 2023, found that Boeing planes remain relatively safe compared to those of its European competitor, Airbus.

With IAM’s current contract set to expire at midnight on September 12, Jon Holden, President of IAM Local 751, warned that a strike could begin as early as the next day unless a new agreement is reached. IAM Local 751 represents workers in two of Boeing’s largest manufacturing facilities: the Renton plant, home to the 737 MAX program, and the Everett plant, which produces the 747, 767, 777, and 787 aircraft.

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