Boeing workers to vote on new offer

As the machinist strike at Boeing pushes beyond a month, the US-based OEM has made its third offer: a 35% general wage increase over the four-year contract. 

The striking workers’ representative IAM Union District 751 said in a statement that the workers will vote on the proposal on October 23, 2024. This would come on the same day as its third quarter earnings release. 

The new wage increase inches closer to the Seattle and Portland workers’ original demands for a 40% wage increase. Whether this will be the true ‘best and final offer’ or if another will follow remains to be seen. 

Boeing had made its ‘best and final offer’ on September 23, 2024, which would have risen the initial wage offer from 25% to 30%. The 25% offer was rejected, with the machinists subsequently going on strike in the early morning of September 13, 2024. The 30% wage offer was not voted on by union members with the union claiming the OEM had “thrown” the offer at it “without any discussion” – accusing Boeing of trying to “bypass” negotiations.

The ‘best and final offer’ was withdrawn on October 8, 2024, with Boeing Commercial Airplanes CEO Stephanie Pope calling the union’s demands as “far in excess” of what the company could accept in order to “remain competitive as a business”. 

In addition to previous concessions in the initial offers, Boeing upped its ratification bonus to $7,000 – having been $3,000 in its initial offer before being doubled to $6,000 in the second. 

The offer also includes a one-time $5,000 contribution to employee’s 401(k) account. Boeing will also increase the 401(k) match to 100% of first 8% of pay, plus an automatic 4% company contribution. 

Furthermore, the company’s bonus plan, AMPP, will be reinstated with a 4% guaranteed annual payout. The bonus plan had originally been eliminated in the initial offer with funding moved to the IAM 401(k). The October offer will remove the IAM 401 (k). 

The strike has been estimated to cost Boeing a staggering $50 million per day. As the strike passed its month mark last week, the company said it could raise up to $25bn in equity and debt. The move came as the company’s credit rating veers closer to junk. 

As the company contends with its fast-growing hurdles, it said on October 20, 2024, that it had sold its surveillance equipment manufacturer Digital Receiver Technology (DRT) to Thales Defence & Security.

“Boeing continually evaluates its offerings to best support our customers and align to our long-term business strategy,” said a Boeing spokesperson. “We recognise that DRT complements the capabilities of Thales Defence & Security and we look forward to opportunities to work together.”

The deal was first reported by Wall Street Journal earlier on Sunday, stating that the company had agreed to a deal to divest a smaller defence subsidiary. Boeing had acquired the unit in 2008. The terms of the deal were not disclosed.