Boeing Strike Ends as Workers Secure 38% Wage Increase

After seven weeks, the costly strike at Boeing’s Seattle facilities has come to an end, with union workers agreeing to a contract that promises a 38% wage increase over the next four years. This agreement was ratified by 59% of voting members from the International Association of Machinists (IAM) District 751 and marks a significant milestone for both Boeing and its 33,000 employees who participated in the strike.

The dispute began in September when workers rejected Boeing's initial proposal of a 25% wage increase. Following that rejection, Boeing presented three additional offers, culminating in the final package that included the 38% wage increase, a US$12,000 signing bonus, and enhanced retirement contributions. While the deal did not restore the traditional pension plan, a key issue during negotiations, union negotiator Jon Holden called the outcome a “victory,” stating, “We can hold our heads high.”

This strike has been characterized as one of the most expensive labor stoppages in U.S. history, costing Boeing around US$100 million in lost revenue per day and resulting in an indirect economic impact exceeding US$11.5 billion. Analysts note that the company’s daily losses, along with a recent US$24 billion raise from investors, highlight the financial pressures Boeing faced during the negotiations.

“While the past few months have been difficult for all of us, we are all part of the same team. There is much work ahead to return to the excellence that made Boeing an iconic company,” said Kelly Ortberg, CEO, Boeing, in a message to employees.

The contract includes several key benefits for union workers:

• 38% Wage Increase Over Four Years: Employees will experience a gradual wage increase, fulfilling their original demand for nearly a 40% increase.

• US$12,000 Ratification Bonus: Each union member will receive this one-time bonus.

• Enhanced 401(k) Contributions: Although the traditional pension plan was not reinstated, Boeing agreed to increase its contributions to workers' 401(k) retirement plans.

• Commitment to Local Production: Boeing has committed to keeping production of its next-generation aircraft in Seattle, which will help secure jobs for thousands of machinists in the area.

Holden acknowledged that not all union members were satisfied with the vote, saying, “There were those who definitely were not happy with the vote. But we have to rebuild the relationship with Boeing leadership.”

The strike resulted in significant production delays for key Boeing models, including the 737 MAX, 767, and 777. Analysts expect the reinitiation of operations after this extended pause to be gradual, predicting several weeks will be needed to ramp up production.

In the short term, production of the 737 MAX, one of Boeing’s top-selling aircraft, is likely to remain low. Jefferies analysts have indicated that Boeing may not achieve pre-strike production levels until 2026, reflecting the long-lasting impacts of the work stoppage on the company’s supply chain and production goals. Additionally, Boeing’s suppliers, who were indirectly affected by the strike, are anticipated to reference this contract in their negotiations, potentially leading to increased costs throughout the aerospace industry.