The abandonment of approximately 33,000 employees in the United States cost the company and its suppliers more than ten billion dollars.
Towards a new beginning? Striking Boeing workers agreed to a new draft social settlement Monday night, ending a strike that lasted more than seven weeks and cost the company and its suppliers more than $10 billion. After rejecting two offers, the IAM-District 751, section of the train drivers’ union (IAM), declared that it had approved with 59% of the agreement which provides for a salary increase very close to its requests, but not the restoration of the old pension scheme. More than 33,000 workers in the Seattle region of the northwest United States will return to two large assembly plants.
“The strike will end and now it’s our turn to get back to work and start building the planes, raise prices and put this company back on the path to financial success.”said Jon Holden, president of IAM-District 751, during a press conference. “I am proud of our members”he added. “They have done a lot and we are ready to move forward”. The project announced Thursday evening provides for a 38% salary increase over the four years of the social agreement. The union was asking for 40%.
Many employees also hoped for the restoration of the guaranteed old-age pension system - 42% of current union members had one – which was abolished by a social agreement in 2014 in favor of a capitalization system. “I think Boeing can do better. They can give us back our pension and do more in terms of work-life balance”Mike Corsetti, a quality inspector for 13 years, said Friday. But for Boeing this backtracking is inconceivable because “overly expensive”. Kelly Ortberg, head of the group since August, said this “Happy” that an agreement has been reached.
A lot of work to regain excellence
“The last few months have been difficult for all of us, but we are on the same team”he said in a message to employees. He underlined “the importance of this moment for our history and for future generations”. “There is much work to do to recapture the excellence that made Boeing an iconic company”. According to the Anderson Economic Group, this is the costliest strike this century in the United States, with a direct impact of more than $11.56 billion since September 13, including $6.50 billion in deficits for Boeing and 2, 87 billion for its suppliers.
US President Joe Biden “happiness” the union and the company “that we have reached an agreement that reflects the hard work and sacrifices of the 33,000 train drivers” and also mentioned the support of his economic team. “Over the last four years we have proven that collective bargaining works. Good deals benefit workers, businesses and consumers and are essential to growing the U.S. economy.”he declared again, on the eve of the presidential elections.
Salary increase of 38%.
This is Boeing’s fourth offer since early September, but the third submitted to a member vote. The first, rejected on 12 September by almost 95% of trade unionists who had also voted for the immediate strike, provided for an increase of 25%. Boeing then proposed 30%, then 35% and finally 38%. The group also reinstated an annual bonus (4% of annual salary), increased the ratification bonus (from $3,000 to $12,000) and increased the contribution to the funded pension plan. It has kept a commitment to produce its next plane - expected by 2035 – in the Seattle region, Boeing’s hometown, which represents tens of thousands of jobs for several decades.
The strikers, without health insurance since late September, had been receiving $250 a week from the union since the fourth week of the strike, and some were dependent on food banks to keep them going. Union leaders had recommended ratification of the first offer, arguing that they had no guarantee of achieving more with a strike, but abstained in the second vote (64% rejection). The end of the strike is crucial for Boeing, which is in great financial difficulty because the strike paralyzes the two
factories that produce the 737 – its flagship plane -, the 777, the 767 and several military programs. Boeing customers also waited for the social conflict to be resolved. Michael O’Leary, head of Ryanair, estimated to CNBC that delays in delivery and certification (737 MAX 7 and 10) will deprive it of 15 million passengers in 2024 and 2025.
Interview between Time.news Editor and Labor Relations Expert
Time.news Editor: Good morning, and thank you for joining us today, Dr. Sarah Mitchell. As a labor relations expert, your insights on recent labor disputes are invaluable. Let’s dive right into it. Boeing recently settled a strike with its workers, costing the company more than $10 billion. Can you give us an overview of what led to such an extensive strike?
Dr. Sarah Mitchell: Good morning! Certainly. The strike involving over 33,000 Boeing employees in the Seattle region stemmed from longstanding grievances related to salaries and pension benefits. The International Association of Machinists (IAM) pushed for substantial wage increases and the reinstatement of an old-age pension system that had been replaced in 2014. The fight over these demands is emblematic of broader tensions within labor markets, especially in high-stakes industries like aerospace.
Time.news Editor: That context is incredibly helpful. The workers eventually accepted a 38% salary increase over four years, though they were initially seeking 40%. What can this settlement tell us about the current labor landscape in the U.S.?
Dr. Sarah Mitchell: This settlement reflects the growing power of labor unions, particularly as workers demand better pay and conditions amid rising living costs. Many employees feel empowered to demand their worth, and in this case, a near-unanimous vote indicates a strong collective resolve. It also illustrates that while companies like Boeing are recovering from financial strain, there is still a significant gap between corporate profits and worker compensation that employees are hoping to bridge.
Time.news Editor: You mentioned that Boeing’s costs due to the strike surpassed $11.56 billion, with significant impacts on suppliers as well. How might this affect Boeing’s operations and supply chain moving forward?
Dr. Sarah Mitchell: The financial repercussions mean Boeing will have to evaluate their operational strategies closely. The costliest strike of the century not only affects their immediate financial health but poses long-term strategic challenges. They’ll likely have to reassess workforce relations and supplier agreements to improve efficiency and avoid prolonged disruptions in the future. Furthermore, there’s pressure to deliver excellent products to regain market trust after such turbulence.
Time.news Editor: Speaking of rebuilding trust, what role do you think effective communication plays in maintaining a healthy relationship between Boeing and its employees post-strike?
Dr. Sarah Mitchell: Communication is absolutely vital. Post-strike, Boeing must engage in transparent dialogues with their workforce. This includes regular updates on financial health, company goals, and how employee contributions play into that larger picture. The sentiments expressed by Jon Holden, the IAM president, emphasize readiness to “get back to work,” which indicates a desire for collaboration moving forward. Trust can be rebuilt through consistent, open channels of communication.
Time.news Editor: President Biden remarked on the importance of collective bargaining in benefiting workers, businesses, and the economy. How do you see this influencing future labor negotiations across industries?
Dr. Sarah Mitchell: The President’s emphasis on collective bargaining reflects a national sentiment that could reshape the future of labor relations. As more industries grapple with the effects of changing economies and workforce demographics, we may see a resurgence in union activities and negotiations. Companies will need to recognize that investing in their employees through fair agreements isn’t just ethical but could also lead to increased loyalty, productivity, and ultimately, profitability.
Time.news Editor: Great insights, Dr. Mitchell. One last question: what advice would you give to companies like Boeing that are navigating these challenges amidst economic recovery?
Dr. Sarah Mitchell: My primary advice would be to prioritize employee engagement and satisfaction. Beyond negotiating salary increases, they should focus on work-life balance, job security, and career development. Creating a culture of respect and one that values employee input will not only mitigate the chances of future strikes but can also cultivate a more committed and productive workforce. This recovery phase presents companies with the opportunity to redefine their workplace culture for the better.
Time.news Editor: Thank you for your expert insights today, Dr. Mitchell. It’s been a pleasure discussing these important topics with you.
Dr. Sarah Mitchell: Thank you for having me. It’s a pleasure to engage in these vital discussions about the future of labor relations.