SEATTLE, Sept 17 (Askume) – Negotiators from Boeing Co (BA.N) and its biggest union will resume talks on a labor contract on Tuesday as the plane maker seeks a quick end to a strike that has cost the debt-laden company more than $100 million.
The strike comes after more than 30,000 Seattle-area Boeing factory workers rejected the first full contract offer in 16 years, which included a 25% pay raise over four years but eliminated annual performance bonuses.
Senior negotiators from Boeing Co. and the International Association of Machinists and Aerospace Workers (IAM) will meet federal mediators in Seattle on Tuesday for initial talks, a person familiar with the matter said.
Another source with knowledge of the mediation said Boeing and union negotiators are not expected to discuss details of the new proposal at the meeting, which will be more about setting rules for future negotiations.
The sources declined to be named as they were not authorised to speak to the media. Boeing and IAM declined to comment.
Analysts say a prolonged strike could cost Boeing billions of dollars in losses, worsen the company’s already strained finances and downgrade its credit rating .
Boeing said on Monday it was freezing hiring and considering furloughs as it cuts costs to limit the impact of the strike and rein in about $60 billion in debt.
Union members picketing outside a Boeing plant in Seattle expressed little sympathy for the company’s financial woes, and many said they expected negotiations to be protracted and the strike to last for weeks.
“I’m glad to see that they’re starting to show signs of struggle because I don’t think they care,” said Martin Klyavkov, 20, who makes wings for Boeing’s best-selling 737 aircraft.
“Boeing will get desperate and get into trouble one day.”
Kliavkov and several other young Boeing workers told Askume they were looking for part-time jobs as food delivery drivers to supplement the $250 weekly payment the union receives during the strike, which began in its third week.
Boeing and union leaders miscalculated early on in negotiations and announced agreement on a tentative contract that was later rejected by more than 94 percent of IAM workers. The union initially demanded a 40% pay increase.
Analysts expect it will take time to restore trust and bring another deal to workers who are overcoming frustrations built up over more than a decade of stagnant wages and rising costs of living.
Melius Research, an equity research firm, found that average employee pay at aerospace and defense companies rose 12% between 2018 and 2023, while Boeing’s declined 6%.
“I think it’s going to take some time for them to reach an agreement,” said Bill George, former Medtronic CEO and a Harvard Business School executive fellow.
“Compensation could rise to the point where they would become uncompetitive for Boeing, but that could be the least of many drawbacks of a prolonged strike.”
