SEATTLE, Sept 12 (Askume) – Workers at Boeing Co ‘s (BAN) U.S. West Coast plant lined up on Thursday to vote on a much-criticised new contract, with some loudly calling for a strike, increasing pressure on the aircraft maker.
A potential strike, which could begin as soon as Friday, would be a major blow to new CEO Kelly Ortberg, who was appointed to restore confidence in the plane maker after a door panel blew off in the air.
About 30,000 workers in the Seattle and Portland areas who build Boeing’s 737 Max, 767 and 777 jets are voting on their first full contract in 16 years.
The International Association of Machinists and Aerospace Workers (IAM) said voting will close at 6 p.m. Pacific time and results will be announced tonight. If the strike is approved, it could begin at midnight.
The proposed deal includes a 25% overall pay increase, a $3,000 signing bonus and a commitment to build Boeing’s next commercial airplane in the Seattle area if the program begins within four years of the contract.
Although the IAM leadership on Sunday recommended that members accept the deal, some employees expressed dissatisfaction , with many demanding a 40% pay hike on top of the original request and lamenting the loss of annual bonuses.
Outside union offices in the Seattle suburb of Renton on Thursday, workers waiting to vote formed a long line down the street. Some held banners and some chanted “strike.” Several Boeing workers interviewed by Askume said they were voting to support the strike and believed most union members would do the same, but more than 20 workers declined to disclose their plans.
Under complex union rules , a two-thirds vote is required to initiate a strike. The contract will only take effect if the number of votes is less than this value.
“I’m willing to strike for as long as it takes to get what we’re entitled to,” said Josh King, a 36-year-old quality inspector. “Usually, a strike doesn’t always result in a bad outcome. But it always leads to a better offer.”
On Wednesday, a union member walked out of the meeting carrying a sign that read: “Strike Against Boeing.”
Workers at Seattle-area Boeing plants that make the Max, 777 and 767 jets have been protesting all week.
One member wearing a high-visibility jacket yelled as he left the building after the vote: “It’s attack time, baby!”
Boeing shares closed up 0.9% on Thursday. Its shares have fallen 36% this year amid concerns about safety, production and a $60 billion debt burden. The strike will deepen the economic crisisAirlines, already struggling with capacity constraints, are facing delays in aircraft deliveries.
Ortberg’s argument
The potential duration of the strike is unclear. A prolonged strike would not only impact Boeing’s finances but also airlines that rely on the plane maker’s planes and suppliers who make parts for its aircraft.
A report by TD Cowen said a 50-day strike could cost Boeing about $3 billion to $3.5 billion. In 2008, a Boeing worker strike shut down the factory for 52 days, losing an estimated $100 million in revenue per day.
S&P Global Ratings said a prolonged strike could delay the plane maker’s recovery and hurt its overall rating . Standard & Poor’s and Moody’s both have Boeing one notch above junk status.
UBS analysts estimated in a report that a short-term strike that does not affect aircraft deliveries would not affect Boeing’s use of cash. However, a one- to two-month strike causing deliveries to be cut by 50% from September to December would mean Boeing faces a cash shortfall of $4 billion.
Michael O’Leary, chief executive of Boeing customer Ryanair (RYA.I), said on Thursday that a strike could lead to further delays in plane deliveries, but added that if that happened, it would be short-lived. “We would like to see the collective bargaining agreement resolved.”
The strike would present several challenges for Boeing: After saying it had offered everything possible, it would have to decide how to respond at the bargaining table. It also had to find a way to secure factories filled with highly valuable semi-finished planes without union workers doing the work.
Ortberg sent a letter to workers on Wednesday urging them to approve the deal.
“A strike would jeopardize our shared recovery, further erode trust with our customers, and harm our ability to shape the future together,” the letter said.
Ortberg and Boeing Commercial Airplanes Chief Executive Stephanie Pope spoke this week about a proposed deal for workers at the company’s jet assembly plants in Everett and Renton, sources said. Boeing said average employee pay would rise from $75,608 to $106,350 by the end of the contract, not including overtime pay.
Harold Wilson, a Boeing machine maintenance technician, said he has mixed feelings about the contract and would like to see better pensions and higher pay for younger workers.
“I think Boeing is going to be in trouble again.”
