Boeing Factory Workers Go on Strike, First Since 2008

Boeing is seeking to resume negotiations with the International Association of Machinists and Aerospace Workers (IAM) following a strike that began on Friday, impacting its production and financial stability. The strike, involving over 30,000 IAM members, came after 94.6% of workers rejected the latest contract offer and 96% voted in favor of the walkout.

The strike affects workers involved in the production of Boeing's 737 MAX and other jet models at facilities in Seattle and Portland. Boeing's Chief Financial Officer, Brian West, acknowledged the challenges posed by the strike, noting that it complicates efforts to meet production targets for the 737 MAX and stabilize the company’s supply chain. “A strike is concerning for production, delivery, and finances,” West said.

The ongoing labor dispute has led to a decline in Boeing’s stock, which fell 3.8% on Friday and has lost nearly 38% of its value this year, resulting in a market value reduction of US$58 billion.

Jon Holden, who led the IAM's negotiations, stated, “This is about fighting for our future,” emphasizing the union's determination to secure a better agreement. Holden also indicated that the union is ready to resume negotiations promptly.

Boeing had proposed a contract that included a 25% pay increase over four years and a US$3,000 signing bonus. However, this offer fell short of the 40% wage increase demanded by workers.

New CEO Kelly Ortberg, who recently took over following a safety incident involving a 737 MAX, has been tasked with restoring confidence in the company. The proposed deal also included a commitment to develop Boeing’s next commercial jet in the Seattle area if the program is launched within the contract term..

The strike has broader implications for Boeing’s operations and the aviation industry. According to JPMorgan, a prolonged strike could impact the pace of material procurement and affect supplier growth expectations.

While the strike is underway, suppliers like CFM, the sole engine provider for the 737 MAX, have reported no immediate impact. However, the disruption could affect airlines awaiting deliveries of the 737 MAX, according to Reuters. 

Boeing's previous strike in 2008 lasted nearly two months and cost the company approximately US$100 million per day in lost revenue.