The labor dispute is getting tougher at Boeing. Kelly Ortberg, the American aircraft manufacturer's new CEO, announced on Wednesday, September 18 that tens of thousands of employees would be furloughed "over the coming days." Since September 13, 33,000 of Boeing's 171,000 or so employees have been striking for pay increases. Before stopping work, the aircraft manufacturer's unionized employees had voted by more than 95% to reject the agreement negotiated between the unions and management.
According to the agreement reached with the International Association of Machinists and Aerospace Workers (IAM), among others, employees would have been entitled to an immediate pay increase of 11%, and 25% spread over four years. They would also have received a bonus of $3,000 (around €2,694). In addition, management had agreed to other benefits, such as a framework for overtime, a 9% reduction in health insurance contributions and an increase in parental leave to 12 weeks.
Above all, Boeing had pledged to produce its next aircraft in the Seattle region of Washington state, where its historic Everett and Renton production sites are located, and in Oregon. These factories are home to the vast majority of the employees who have been on strike for the past week.
For the strikers and their unions, management's proposals are largely insufficient. They are calling for wage increases of 40%, in particular to offset the effects of inflation in recent years. This is on a par with what pilots at several US companies have just obtained. They are also demanding restoration of their pension plan.
For those on strike at Boeing, the forthcoming introduction of furloughs will have serious consequences. In the US, these employees will no longer be paid and will soon have no health coverage. Moreover, "to limit this hardship" of the drastic measure, Boeing's new CEO has specified that the employees affected will be subject to one week's furlough every four weeks, in rotation.
"It is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover," Ortberg tried to explain on Wednesday, just after federal mediation failed. According to the Boeing CEO, the furloughs will also affect "a large number of US-based executives, managers and employees." For good measure, he added that he and the management team would "take a commensurate pay reduction" to that lost by the furloughed workforce.
At Boeing, strikes are an exception. The last dispute dates back to 2008. After eight weeks on strike, management and unions reached an agreement. At the time, Boeing was the world leader in aeronautics, with its finances at a peak and a full order book, but it was losing $100 million a day. Sixteen years on, the Boeing of 2024 has lost a lot of its grandeur.
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