After 40 days on strike, 33,000 Machinists rejected an improved contract offer from Boeing by 64 percent on Wednesday. The offer included a 35 percent wage increase over 4 years.
Members of Machinists (IAM) District 751 and District W24 build passenger jets and and freighters, including the 737, 767, and 777. Most work at Boeing’s huge factories at Everett and Renton, Washington.
“It’s a little bit better, but it still needs to go further,” said Ky Carlson, who was staffing a picket line at Everett on Tuesday, where she would normally be assembling the 777.
“It’s an easy no vote for me,” said Jon Voss, a mechanic and steward at Renton, where he builds wings for 737, “because I know Boeing has multiple offers ready to just throw at us until we finally get what we deserve.”
Mylo Lang, an apprentice machinist at Boeing’s Auburn, Washington fabrication plant, said his priorities were pay, retirement, time off, and no mandatory overtime. “We’ve made progress in each of those areas, but we haven’t gotten a big win, a definitive win in any of them.”
The union originally demanded a 40 percent raise, and most strikers still see that as the goal, with a bigger bump in the first year.
No Pensions, No Planes
In the new offer, the company proposed to contribute 4 percent of pay into a 401(k), plus a match of up to 8 percent that a worker contributes, and a one-time $5,000 contribution to each worker’s 401(k).
But many people are sticking with the slogan, “No pensions, no planes,” said Carlson. They want the company to restore their defined benefit pension, which Boeing froze in 2016: Those who were vested couldn’t accrue more, and everyone, old and new, was given a 401(k).
About 40 percent of the current workforce had the pension before it was frozen. Voss, with 13 years in, calculated that the loss cost him $600,000.
Workers say the pension was stolen by company job blackmail and union collusion. In 2013 Boeing forced a contract reopener by threatening to move more work away from the Puget Sound area.
“During that extension we lost our defined benefit pension, stagnated wages, there was a massive cost-shift on healthcare, and we were stuck in that agreement for almost 11 years,” District 751 President Jon Holden told “Valley Labor Report.”
New Increases
After a decade of stagnating wages, pay is still the key sticking point. Machinists at Boeing can start at $20 an hour — just above the area’s minimum. The new contract would have added 12 percent to that in the first year (a raise of $2.40), with raises in the next three years of 8, 8, and 7 percent.
Workers overwhelmingly rejected the company’s previous offer, with a 25 percent wage increase, on September 12. That contract would have eliminated a union-wide annual performance bonus that is usually 3 to 4 percent of earnings. Workers charged that after a 16 years of half-percent annual wage gains, they would barely keep up with inflation. The union had recommended that contract, but the members voted 96 percent to strike.
The new offer, which union leadership presented for a vote but failed to recommend, restored the annual performance bonus and included a new guarantee that it would not go below 4 percent. It also included a $7,000 bonus on signing.
Both contract offers included a guarantee that Boeing’s next plane would be built in the Puget Sound area. Workers said that was not going to happen during the four-year life of the contract. But Holden argued that once that guarantee is in the contract, it becomes an issue the union can strike over if the company tries to take it out. A more likely timeline for production of a new single-aisle passenger jet is ten years.
Weird Wage Progression
Slow wage progression remains a sore spot. “It doesn’t really seem like they’ve done a whole lot for newer people, which make up a pretty significant portion of the workers,” said Lang, who has worked for Boeing for six years. “We’ve had a really high turnover, especially since the pandemic.” Around 40 percent of workers have less than five years in.
Currently, if you hire in at $20 an hour, you get 50 cent wage increase every six months. But then at year six, you leap to the full pay for your classification — if you were able to survive that long. The “zoom” to top pay is a result of starting pay stagnating while a cost of living adjustment has incrementally increased top pay. The rejected contract proposal would not change that, although the union has proposed fixing it
“There’s got to be more incentive for people,” said Voss, “because the starting wages and the length of time it takes to actually make money is just too long, and they’re not going to retain talent.”
If wages helped retention, it would help Boeing, too, Voss said. “Getting people who care about what they’re doing is very important.”
Voss was also concerned that the proposed contract left janitorial workers maxed out at $26.56, cut off from the increases other workers would get. “They’re some of the hardest-working people here,” he said.
On the up side, the October 19 proposal would have ended the practice of bumping people down the wage progression when they change classifications, which might happen if a worker trained for a different job. The proposal would have allowed those workers to stay at their existing pay when moving laterally.
Overtime Still Not Fixed
Boeing heavily relies on mandatory overtime in some departments, pushing workers to the point of physical collapse or mental breakdown.
The new contract bans a second consecutive weekend of mandatory overtime, and limits days to ten hours. But it still allows up to 112 hours of mandatory overtime in a three-month period.
Many workers would like to see the contract ban mandatory overtime altogether.
“I don’t think that people should be required to work more than 40 hours a week to keep their jobs,” said Lang. “That seems like something that we’ve fought pretty hard for in this society, and something that we should be definitely holding every company to.”
Last year Machinists won this demand at Spirit Aerosystems, a former Boeing unit the company sold in 2005. But in return, the Wichita, Kansas, workforce agreed to allow alternative work schedules, with rotating shifts that can rob workers of regular weekends off. Boeing is in the process of buying Spirit back.
State of the Company
Workers report that the company has been unable to produce planes in the struck factories at Everett and Renton, despite trying to get managers to work on them. Production was already way behind orders before the strike, with a backlog of 4,000 orders for the 737.
Showing financial stress, on October 15, the company announced plans to raise $25 billion through borrowing and selling stock, and to open a $10 billion line of credit. It hopes to avoid a ‘junk bond’ rating, which would increase its borrowing costs.
The company spent $61 billion on stock buybacks between 1998 and 2018, indulging shareholders and company executives instead of investing in its workforce or in airplane production. Those chickens came home to roost when underinvestment in new plane development led to flawed design workarounds, leading to two deadly 737 Max crashes in 2018 and 2019 that killed 350 people.
The strike has halted payments for planes and Boeing reported a staggering $6 billion loss for the quarter on October 23.
When the strike started, Boeing announced furloughs of managers and cancelled parts orders to conserve cash. On October 11, Boeing announced a ten percent reduction in its 170,000 worldwide labor force.
Some workers were freaked out by the layoff announcement at first, Carlson said, but Machinists are unlikely to be made redundant, since the company has been struggling to keep up with demand and to keep trained workers from leaving.
Strikers Holding Up
Boeing cut off strikers’ health care at the end of September. Since the third week of the strike, the union has been providing $250 a week in strike pay, and most strikers are either living on savings or relying on additional jobs.
Months ago, when Voss asked co-workers about their plans for a strike, he learned that Boeing was a second job for some newer workers. They told him, “I’m just going work my first job more while we’re on strike.” Others were easily able to pick up work elsewhere.
“Financially, people are ready to weather the storm,” he said.
Carlson said she knows a lot of people who have gone to work for Amazon. “We’re nowhere near the breaking point,” she said.
Lang, in Auburn, said he noticed that more people have been using the community food supplies provided at the union hall.
“I think that just people are really committed to getting a good deal,” said Lang. “We recognize that this is a unique time for us, that we have a unique bargaining position. We’re in it for a good contract, not just an okay contract.”
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