Boeing avoids strike at three defense factories, for now

Latest / July 31, 2022 / Admin / 0

The International Association of Machinists and Aerospace Workers said an overnight bargaining session led to Boeing’s new offer and workers will vote on Wednesday whether to accept it.

Under the new contract offer, employees can choose to receive a lump sum payment of $8,000 – less tax withholdings – upon ratification or can choose to have the entire amount deposited into a 401(k) plan ( k). The company is dropping its revised 401(k) match proposal.

Boeing said in a statement Saturday that “this new offer builds on our previous strong and highly competitive offer and directly addresses issues raised by our employees. We hope they vote yes on Wednesday.”

The agreement in principle does not necessarily mean that the risk of a strike has been eliminated. A number of companies struck deals with union leaders, only to see rank-and-file workers reject the proposed contract, forcing a strike. That’s what happened at John Deere where 10,000 members of the United Auto Workers union went on strike in October after rejecting a tentative agreement. They went on strike for five weeks, rejecting another tentative agreement along the way, before voting in favor of a third agreement and returning to work.

Union members at Boeing’s three defense factories overwhelmingly rejected the company’s previous offer a week ago.

Workers at the three plants in Missouri and Illinois build the F-15, F-18, T-7A trainer aircraft and the MQ-25 unmanned tanker. Boeing announced on July 24 that it was activating a contingency plan in the event of a strike. But CEO Dave Calhoun had told investors on a conference call this week that delivery delays to military customers would occur in the event of a strike.

The standoff began after the union criticized Boeing’s 401(k) payments in the contract and workers rejected the offer.

“Boeing previously withdrew a pension from our members, and now the company is unwilling to adequately compensate our members’ 401(k) plan,” the union said July 24.

Boeing’s earlier 401(k) offer on Sunday included a company contribution of up to 10% of worker wages as well as an automatic 2% contribution for 2023 and 2024. Boeing had also offered a ratification bonus of $3,000.

Boeing currently provides a 4% company contribution and a 75% match on the first 8% of an employee contribution.

Boeing has posted heavy losses each of the past three years, with net losses exceeding $18 billion since the start of 2019. But those losses were mostly related to its commercial aircraft business, which was rocked by the grounding of 20 months of the 737 Max. which began in March 2019 following two fatal crashes, as well as a sharp drop in demand for air travel caused by the pandemic.

The company’s defense, space and security business unit has posted a profit of $1.5 billion each of the past two years. But Boeing reported a loss of $929 million in its defense business in the first quarter of this year after a number of special charges, including a $660 million charge related to the refurbishment of two 747 jets that will be used as new Air Force Ones. Boeing posted a narrow profit of $71 million in the second quarter.

– CNN Business’ Chris Isidore contributed to this report

Boeing avoids strike at three defense factories, Company, for now - CNN