Boeing machinists rejected a new labor deal that included 35% wage increases over four years, leading to a continued strike that has halted most of the company’s aircraft production in the Seattle area. The rejection is a setback for Boeing, which reported a $6 billion quarterly loss and warned that it would continue to burn cash through 2025. The strike is costing Boeing about $1 billion a month and has led to the company cutting 10% of its global workforce. The machinists originally sought wage increases of 40% and were upset about losing their pension plan in a previous contract. The latest proposal did not include a pension, leading to the rejection of the contract.
The strike began in September after machinists voted down a previous tentative agreement that proposed raises of 25%. The new proposal included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus, and other improvements. The union is pushing to go back to the negotiating table as they feel the agreement did not meet their demands. Boeing has agreed to build its next aircraft in the Pacific Northwest as part of the contract.
This labor strife adds to Boeing’s ongoing issues, including safety and quality problems, as well as the blowout of a door plug midair from a Boeing 737 Max 9 earlier in the year. The extended strike is also affecting the aerospace supply chain, with companies like Spirit AeroSystems announcing temporary furloughs and possible layoffs if the strike continues.
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