Over 30,000 Boeing workers, or about 20% of the company's employees, are preparing to strike on Friday after rejecting a new labor contract.
Workers in Washington and Oregon voted against an agreement that Boeing and the labor union for machinists and aerospace workers proposed on Sunday. The vote was the first full contract vote in 16 years. It did not come out in Boeing's favor: almost 95% voted to reject the contract and 96% voted in favor of striking.
"The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members," Boeing said in a statement Friday. "We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement."
Under rules set by the International Association of Machinists and Aerospace Workers, the labor union for Boeing employees, at least two-thirds of unionized workers have to vote in favor for a strike to begin or a contract to be rejected.
"IAM members from across North America stand in solidarity with our members in the Pacific Northwest and California," the union said in a statement released Thursday. "Our goal is to get a strong contract that meets the needs of our members."
On Thursday, dozens of employees marched to a union hall near Boeing's 737 Max plant in Renton, Washington, blowing whistles, banging drums, and holding up signs calling for a strike.
Photographs from outside the Renton facility showed workers picketing overnight.
The strike would pause most of the American aircraft maker's production, a headache for the company grappling with safety and reputation concerns after taking several hits this year. It is also a big blow to its new CEO Kelly Ortberg, who stepped into the role about six weeks ago.
A day before the vote, Ortberg urged workers to accept the contract and not to strike, saying that it would jeopardize the company's recovery.
According to an estimate from TD Cowen, a 50-day strike could cost Boeing an estimated $3 billion to $3.5 billion. The last strike, in 2008, shuttered plants for 52 days and hit revenue by an estimated $100 million per day, Reuters reported.
The rejected contract would have increased workers' general wages by 25% over the length of the four-year contract. Boeing would also build its next commercial plane in the Seattle area, as long as the program is initiated within four years of the contract. The tentative labor contract, which included a pay increase over four years, was touted as another win for the beleaguered company.
The proposal left workers unsatisfied, Jon Holden, president of the IAM's district 751 and lead negotiator on the Boeing contract, told Reuters on Monday.
"They're angry," Holden told Reuters. "It's hard to come off of 10 years when you lost so many things that were critical."
Some union members had been pushing for a much higher wage hike— up to 40% — and the return of the company's pension plan, which it discontinued a decade ago, Holden said.
