The union strike at Boeing “could go on for a while” as workers are confident they can get bigger wage increases and an improved pension, as per union leader Jon Holden on Saturday. More than 30,000 members of the International Association of Machinists and Aerospace Workers (IAM), began a strike on Friday after overwhelmingly voting down a new contract by Boeing.
Boeing’s global jetliner shortage
Boeing’s first strike in 16 years could further compound global shortages of jetliners that have been pushing up airfares and forcing airlines to keep older jets flying longer, industry executives and analysts said.
It is Boeing’s first strike since 2008, and Boeing Chief Financial Officer Brian West warned a prolonged walkout could hurt output and “jeopardize our recovery”.
Airlines have struggled to expand capacity to meet rising demand as supplies of jetliners are curtailed by parts shortages, industry-wide recruitment problems and overloaded maintenance shops.
Boeing workers strike negotiations
Boeing and union negotiators are due to return to the bargaining table next week, in talks overseen by U.S. federal mediators. This was after more than 94% of workers voted to reject an initial contract offer that Holden had endorsed.
Holden said the priorities for his member workers were a bigger wage increase and the restoration of a defined-benefit pension scheme that the IAM lost during a previous round of negotiations with Boeing a decade ago.
“We have the most leverage and the most power at the most opportune time that we’ve ever had in our history, and our members are expecting us to use it,” Holden told NPR.
“I know that our members are confident. They’re standing shoulder to shoulder and they’re ready. So it (the strike) could go on for a while.”
Boeing workers initial wages deal
The initial deal by workers included a 25% pay rise spread over four years and a commitment by Boeing to build its next commercial jet in the Seattle region, if the plane program was launched within the four-year period of the contract.
Union members, venting frustration at years of stagnant wages and rising living costs, said removal of a performance bonus in the Boeing offer would erode half of the headline salary increase.
Boeing strike impact
The impact of the strike has made the Boeing’s stock fell 3.7% on Friday. It has tumbled almost 40% so far this year, slashing the company’s market value by roughly $58 billion.
A long strike could further damage Boeing’s finances, already groaning due to a $60 billion debt pile. A lengthy pause on plane production would also weigh on airlines that fly Boeing jets and suppliers that manufacture parts.
A strike “could have an impact on production levels, which could exacerbate some of the supply shortages that are in the market at the moment for sure,” he said after Avolon announced it had acquired a large portfolio of jets from Castlelake.
Airlines have struggled to expand capacity to meet rising demand as supplies of jetliners are curtailed by parts shortages, industry-wide recruitment problems and overloaded maintenance shops.
