On Monday, U.S. West Coast factory workers began voting on a new contract offer from Boeing that could bring an end to a seven-week strike and restart production of the company’s critical 737 MAX jets. Boeing’s latest offer includes a 38% wage increase over four years, a modest improvement from the 35% raise proposed in a deal that was rejected by the workers just 12 days ago.
The outcome of this vote is pivotal for Boeing, which has struggled to maintain production amid the strike. The disruption halted the manufacturing of Boeing’s best-selling 737 MAX and could potentially delay the company’s year-end production target of 38 jets per month until 2025.
Boeing’s Offer Comes at a Crucial Time
The new contract proposal is Boeing’s fourth since the strike began on September 13. The company is under pressure, as last week it announced a $24 billion share issue to bolster its finances amid the strike’s impact. Boeing’s 737 MAX jet production has been a key revenue driver, and the strike has significantly hampered operations, including the production of the 767 and 777 widebody planes.
The International Association of Machinists and Aerospace Workers (IAM), which represents the 33,000 striking employees, stated that workers could return to their shifts as early as Wednesday if the deal is approved. However, if the deal is rejected, they could remain off the job until at least November 12.
Divided Sentiment Among Workers
Despite the new offer, opinions among factory workers remain divided. While some workers are eager to return to their jobs, others are hesitant, holding out for the 40% wage increase they initially demanded. Boeing’s latest offer would add an estimated $1.1 billion in costs over four years, increasing the worker cost base to around $2.5 billion.
Jon Holden, President of IAM District 751, has endorsed the new contract, urging workers to approve the deal. He cautioned that rejecting the current offer could result in a less favorable deal in the future. Boeing shares responded positively to the news, rising 0.4% to $155.27 by midday, reflecting market confidence that the strike may soon end.
Boeing’s Challenges and Potential Production Delays
Should the contract pass, Boeing’s next challenge will be ramping production back to pre-strike levels. The company has been struggling with production issues even before the strike, and resuming the halted production lines won’t be an immediate process. Boeing CFO Brian West noted that 737 MAX production was hovering around 25 jets per month in June and July, significantly lower than the company’s end-of-year goal of 38 jets per month.
Boeing has faced ongoing crises, including the departure of former CEO Dave Calhoun earlier this year after a door panel blew off a 737 MAX midair. Current CEO Kelly Ortberg took over in August with a mission to repair relations with factory workers and implement a cultural shift within the company.
A Crucial Moment for Boeing and the Aerospace Industry
The end of the strike would not only benefit Boeing but also its aerospace suppliers, many of which have been forced to furlough workers. Airlines awaiting aircraft deliveries have also experienced delays due to the production halt. A successful contract vote could bring some much-needed stability to the industry and help Boeing regain momentum after a difficult year.
The contract voting ends at 7 p.m. Pacific Time, with the results expected shortly thereafter. If approved, Boeing workers could be back on the production line by Wednesday, allowing the company to begin its recovery and meet delayed aircraft delivery schedules.
