Boeing on Monday was hit with its second strike in less than a year, as 3,200 hourly machinists walked off their aerospace jobs in the St. Louis area.
Members of the International Association of Machinists (IAM) voted to authorize a strike at three defense plants starting Monday at 12:59 a.m. ET.
“3,200 highly-skilled IAM Union members at Boeing went on strike at midnight because enough is enough,” the union wrote on X after the walkout began.
The union overwhelmingly rejected a tentative agreement a week ago that would have given many of the members raises of 40% over the four-year life of the contract. The members voted Sunday to reject a revised contract that removed scheduling provisions that had prompted objections from rank-and-file members.
“IAM District 837 members build the aircraft and defense systems that keep our country safe,” IAM Midwest Territory General Vice President Sam Cicinelli said in a statement Sunday. “They deserve nothing less than a contract that keeps their families secure and recognizes their unmatched expertise.”
The strike is the latest blow to Boeing, following six years of massive financial losses and setbacks in many areas of its business, including the defense and space unit affected by this strike. The company has rung up core operating losses of $42.2 billion since the second quarter of 2019. That was after the fatal crashes of two commercial 737 Max planes and the subsequent 20-month grounding of the model.
Military aircraft
The company’s problems in its commercial plane unit have, understandably, gotten the most attention. But Boeing Defense, Space and Security unit also logged nearly $11 billion in losses from late 2021 through the end of last year. That was largely due to Pentagon contracts that made the company responsible for cost overruns, including two new Air Force One jets. But so far this year, the unit has been profitable.
The workers in St. Louis and St. Charles, Missouri, and Mascoutah, Illinois, build such military aircraft as F-15 and F/A-18 fighter jets, the T-7A Red Hawk trainer, and the MQ-25 Stingray unmanned refueler. The F-47 stealth fighter jet, the Pentagon’s next-generation fighter plane, is due to be built at a Boeing plant in the St. Louis area, though the company has not said which plant will build it or when production will start. Boeing also operates some nonunion plants in the area.
“We’re disappointed our employees rejected an offer that featured 40% average wage growth and resolved their primary issue on alternative work schedules,” said a statement from Dan Gillian, Boeing general manager and senior St. Louis site executive. “We are prepared for a strike and have fully implemented our contingency plan to ensure our non-striking workforce can continue supporting our customers.”
Earlier this week, Boeing said that a $5,000 signing bonus that was part of its offers to the union would be withdrawn if the members did not ratify a deal before the strike deadline.
The IAM negotiating committee had recommended that members ratify the deal presented last week.
“With stronger pensions, real wage growth, and better work-life balance, we’ve delivered a contract that meets the moment,” the committee said at the time.
But less than 5% of the rank-and-file workers of IAM Local 837, which represents the defense workers, voted for that tentative agreement. The union did not give precise results in Sunday’s votes.
Despite years of serious financial problems, Boeing is still one of the nation’s largest manufacturers, with contractors spread across all 50 states. It also has a huge backlog of contracts, for both commercial and military aircraft, that will keep it in business.
Boeing CEO Kelly Ortberg said in the company’s earnings call last week that he believes the company will be able to weather the costs of the strike, which he suggested would be far less than the cost of last year’s strike of 33,000 commercial plane unit workers.
“The order of magnitude of this is much, much less than what we saw last fall,” he said. “I wouldn’t worry too much about the implications of the strike. We’ll manage our way through that.”
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