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Boeing workers have voted 59 per cent in favour of ending their strike and returning to work, paving the way for the troubled manufacturer’s Washington factories to start making planes again.
The workers on Monday accepted a 38 per cent pay raise over the next four years, representing a significant win for the 33,000 members of the International Association of Machinists and Aerospace Workers District 751. The company originally offered 25 per cent before employees walked off the job nearly eight weeks ago.
The union’s bargaining team, which endorsed the deal on Saturday and said it was time to settle the strike, called it “one of the strongest contracts in the aerospace industry”.
Boeing chief executive Kelly Ortberg said on Monday that the company was “pleased” to have reached agreement with union members.
“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 made Boeing an iconic company.”
Boeing has been reeling from a string of problems over the past five years, partly due to its own mistakes, which Ortberg acknowledged in September.
The strike, which halted production of the 737 Max, Boeing’s single-aisle cash cow, is its most recent difficulty in a list that includes twin fatal crashes, the Covid-19 pandemic and an improperly bolted door panel flying off a jet in January at 16,000ft.
The company reported a $6bn loss in the third quarter, the second-largest in its history, and said it would continue to burn cash next year. Last week, Boeing sold $24bn in stock, the most equity ever raised by a US company, as it sought to shore up its finances and protect its investment-grade credit rating.
The strike has been costing Boeing an estimated $50mn a day, according to Bank of America analyst Ron Epstein, for a total so far of $2.7bn.
Workers can return to work as early as Wednesday and must return by next Tuesday.
The workers rejected the initial deal in September, which was backed by union leadership and was worth a 25 per cent wage hike. Ninety-six per cent voted in favour of striking, fuelled by a decade of anger over a 2014 negotiation that ended workers’ traditional guaranteed pensions, replacing them with defined-contribution retirement investments.
That deal also only increased pay by 4 per cent between 2016 and 2024, a period of substantial inflation.
Last month, a second offer that would have raised wages by 35 per cent but did not restore the traditional pension was voted down by 64 per cent of union members who cast ballots.
While it does not restore the traditional pension, the latest offer will raise wages and bring back a performance bonus that was eliminated in the first offer, as well as pay a $12,000 ratification bonus to members.
The contract also guarantees that when Boeing launches its next plane, it will be built in Washington, a key union win given the company’s history of moving work away from its unionised factories or threatening to do so.
The improved wages included in the approved deal will cost Boeing about $1.1bn over the next four years, assuming the average worker earns $76,000 a year, said Jefferies analyst Sheila Kahyaoglu. The signing and performance bonuses will raise this by another $526mn.
During the strike, Boeing furloughed workers and halted deliveries from many suppliers as it tried to preserve cash. It also announced it would cut about 17,000 jobs and delay delivery of the 777X by another year, until 2026, making it six years late.
The pain has spread through the supply chain, with furloughs beginning last month at Spirit AeroSystems, which supplies the fuselage for the 737 Max.
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