Boeing withdraws contract offer after talks with striking workers break down

Associated Press

October 09, 2024 / 9:14 am

caption: Boeing workers wave picket signs to passing drivers as they strike after union members voted to reject a contract offer Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash.

Boeing has withdrawn a contract offer that would have given striking workers 30% raises over four years after talks broke down.

The manufacturer said that it had boosted its offer for union workers for take-home pay and retirement benefits during two days of negotiations.

“Unfortunately, the union did not seriously consider our proposals. Instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business,” Boeing said in a prepared statement. “Given that position, further negotiations do not make sense at this point and our offer has been withdrawn.”

The union said that it surveyed its members after receiving Boeing’s most recent offer, and it was rejected overwhelmingly.

“Your negotiating committee attempted to address multiple priorities that could have led to an offer we could bring to a vote, but the company wasn’t willing to move in our direction,” the International Association of Machinists and Aerospace Workers District 751 said in a message to members.

The union complained last month that Boeing had publicized its latest offer to 33,000 striking workers without first bargaining with union negotiators.

The new offer — and labeling it a final one — demonstrates Boeing’s eagerness to end the strike that began Sept. 13. The company introduced rolling furloughs of non-unionized employees last week to cut costs during the strike.

The strikers face their own financial pressure to return to work. They received their final paychecks last week and will lose company-provided health insurance at the end of the month, according to Boeing.

The company said its new offer is contingent on members of the machinists’ union in the Pacific Northwest ratifying the contract by late Friday night, when the strike will be a little over two weeks old.

The union, which represents factory workers who assemble some of the company’s best-selling planes, waited several hours before pushing back Monday night.

“This proposal does not go far enough to address your concerns, and Boeing has missed the mark with this proposal,” the union told members. The group added that it will survey members about the new offer.

Boeing’s latest offer includes upfront pay raises of 12% plus three annual raises of 6% each.

It would double the size of ratification bonuses to $6,000. It also would keep annual bonuses based on productivity. In the rejected contract, Boeing sought to replace those payouts with new contributions to retirement accounts.

Boeing said average annual pay for machinists would rise from $75,608 now to $111,155 at the end of the four-year contract.

The new offer would not restore a traditional pension plan that Boeing eliminated about a decade ago. Striking workers cited pay and pensions as reasons why they voted 94.6% against the company’s previous offer.

Boeing also renewed a promise to build its next new airline plane in the Seattle area -- if that project starts in the next four years. That was a key provision for union leaders, who recommended adoption of the original contract offer, but one that seemed less persuasive to rank-and-file members.

The strike is likely already starting to reduce Boeing’s ability to generate cash. The company gets much of its cash when it delivers new planes, but the strike has shut down production of 737s, 777s and 767s. Work on 787s continues with nonunion workers in South Carolina.

On Friday, Boeing began requiring thousands of managers and nonunion employees to take one week off without pay every four weeks under the temporary rolling furloughs. It also has announced a hiring freeze, reduced business travel and decreased spending on suppliers.

The money-saving measures are expected to last as long as the strike continues.