SEATTLE (AFP) – Talks between Boeing and striking US factory workers are due to resume early next week under a federal mediator, the government said Friday, after workers voted overwhelmingly to reject an earlier proposal from the embattled aviation giant.
Thousands of Boeing factory workers in the United States walked off the job Friday over the pay dispute, its first strike in 16 years.
Union leaders called for the strike to start just after midnight (0700 GMT), shortly after hourly workers in the Seattle region in the Pacific Northwest spurned the tentative contract with 94.6 per cent of the vote, and to strike with 96 per cent.
The strike shuttered two major plane assembly plants for the 737 MAX and 777 in the Puget Sound region and sidelines some 33,000 workers, further delaying the financially stressed company’s turnaround efforts.
“We sent an overwhelmingly large message to Boeing that they cannot continue to treat us this poorly,” Mike Corsetti, who has worked at Boeing for 15 years, told AFP Friday afternoon as he picketed in front of the Everett factory.
Thursday’s vote was a decisive rejection of a deal line workers said was far less generous than depicted by Boeing executives, marking the latest show of defiance by unions following earlier major strikes in the auto and entertainment industries.
Boeing, led by new CEO Kelly Ortberg, had hoped a 25-per cent wage hike over four years and a commitment to invest in the Puget Sound region would be enough.
But rank-and-file workers described it as a slap in the face after more than a decade of nearly stagnant wages.
Late on Friday, the Federal Mediation and Conciliation Service (FMCS) said it had been in contact with both parties and supported their return to the negotiating table.
“As part of the effort to resolve the current labor dispute and end the work stoppage, which began at 12:01 am PDT this morning, the parties will resume meetings early next week,” said a FMCS statement.
Workers had sought a 40-per cent wage hike and critics have said the 25-per cent figure is inflated because the new deal also eliminates an annual company bonus.
Other points of contention include the deal’s failure to restore a pension, as well as Boeing’s pledge to build its next plane in the Seattle region, which critics said offers no promises beyond the four-year contract.
Some workers expressed anger about the compensation packages offered to Dennis Muilenburg and Dave Calhoun, two former CEOs who received multi-million dollar pay-offs even as the company faced turmoil.
Boeing Chief Financial Officer Brian West said Friday that the company had put “our best foot forward” and felt confident in the deal after it was endorsed by union leadership.
But Boeing leadership quickly understood that the offer “didn’t meet the mark and was not acceptable” to the rank-and-file, West said at a financial conference.
“We want to get back to the table and we want to reach an agreement that’s good for our people, their families, our community,” he added.
Corsetti, 51, said he was not impressed with Boeing’s conciliatory posture.
“It’s all talk until they actually come up with a real offer,” he said. “What they considered their final offer should have been the starting point, not the final point.”
The most recent stoppage by the International Association of Machinists and Aerospace Workers (IAM), in 2008, lasted 57 days.
According to analysts at TD Cowen, a 50-day strike would deprive Boeing of between USD3 billion and USD3.5 billion in cash flow, and would have a USD5.5 billion impact on revenue.
Richard Aboulafia, managing director of the AeroDynamic Advisory consultancy, said a lengthy strike would damage Boeing’s turnaround prospects, but noted that a 2023 strike at Boeing supplier Spirit AeroSystems lasted less than two weeks.
Labor historian Nelson Lichtenstein predicted a “relatively shorter” strike at Boeing compared with past stoppages as the company faces pressure from Wall Street to improve its quality control enough to boost production and return to profitability.
“The quality question is totally linked to the frozen wages and lost institutional memory” due to staff turnover, said Lichtenstein, who teaches at the University of California at Santa Barbara.
To win a deal, Boeing will need to increase pay and augment a pledge to build the next airplane in the Seattle region to ensure that it is good beyond the four-year life of the contract, Lichtenstein said.
Boeing was the biggest loser on the Dow index on Friday, slumping 3.7 per cent.
