After seven weeks of walking the picket lines, Boeing machinists are going back to work starting Wednesday.
The machinists will get a big 38% pay increase over the four-year life of the contract and a $12,000 spiff for each union member, but the union won't get back the pension plan it negotiated away years ago. The head of the union said it was a make-or-break issue, but in the end, 60% of the membership of the International Association of Machinists and Aerospace Workers’ District 751 and W24 voted to approve the pact.
In the end, the company's new CEO Kelly Ortberg was hired to save the company, not kill it. He issued an ultimatum to the union before the vote vowing to begin removing concessions given to the union during negotiations. The IAM's membership in the Pacific Northwest numbers 33,000 but 26,000 members chose to vote for this third offer.
“This was a hard-fought strike. There was tough, hard bargaining on both sides. Our members voted to strike, withhold their labor, and they stood strong. They stood together,” union leader Don Holden said during a press conference, according to Manufacturing Dive.
He said they secured a "victory," but "now it’s our job to get back to work and start building the airplanes, increase the rates, and bring this company back to financial success.”
Boeing has already hemorrhaged billions of dollars because of the strike. The company was losing an estimated $50-$100 million per day, according to industry analysts. Leeham News analysts said that the full impact of the strike will be public when the company posts its Third Quarter financial results.
Related: Boeing's Economic Dominoes Begin to Fall 5 Weeks Into Union Strike
The company was already in a precarious fiscal doom loop when the machinists went on strike due to the pre-existing fallout over 737 Max safety issues. After getting Boeing's most popular plane back on track and resuming work on it, the program was idled again because of the strike. Production of the popular 767 and 777 planes was also stalled during the strike.
Boeing responded to this fiscal hit by laying off 10% of the employees, cutting off contract workers, and halting multiple programs. The company even sent up a trial balloon to find potential buyers of portions of its space program in order to telegraph to The Street its seriousness about doing what it took to put its fiscal house in order.
Ortberg set the tone for employees coming back to work at Boeing, issuing this brief statement after the vote on Monday night:
We were pleased to reach a ratified agreement with IAM 751 & W24 tonight.
While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company.
This is an important time in our history, and like generations before us, we will face into the moment together, and stronger as one team.
Ortberg and his executive team won't get much of a break, however. After the holidays, the company starts negotiations with its St. Louis machinists who make the F-15 fighter jet and a refueling craft. That contract expires in July.
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