Boeing Workers Strike After Rejecting 25% Pay Rise

“Boeing workers strike after rejecting a 25% pay rise in a labor dispute affecting 30,000 workers. The strike impacts the production of key planes and challenges Boeing’s new CEO.”

Some employees from Boeing Company in Seattle and Portland have embarked on a massive strike after declining a proposed contract that offered a 25% raise in wages over four years. This labor action which kicked off at midnight Pacific Time on Boeing’s Friday, entails over 30,000 workers who build Boeing’s important commercial planes such as the 737 Max and 777. The move to shut down the production line is another setback to the aerospace firm as it continues to record operational costs, operating loss, and reputation against the backdrop of safety concerns and two fatal crashes.

Overwhelming Rejection of Proposed Deal

Through an analysis of the rhetorical strategies, it is obvious that the proposed deal was overwhelmingly rejected.

More than 400 of the union members of IAM District 751 voted against the proposed contract which was turned down in a 95% vote. Out of the people who voted, 96 percent said that they supported the strike action, something that would point to the general displeasure with the company’s offer.

Union’s Standpoint

Jon Holden, IAM District 751 president said, “Our members made themselves heard tonight, we strike at midnight.” The union earlier declared its demand for a pay rise of 40 percent far from Boeing’s proposal of 25 percent. On top of the guaranteed raise in wages, the tentative deal had also stipulated that Boeing would produce its next commercial airplane in the Seattle area if such a project commenced within the lifetime of the contract.

Although the agreement was characterized as being the best deal the union had ever signed, this huge marginalization depicts a huge gulf between the workers and both the company as well as the union officials.

Boeing’s Response and Setback

Boeing gave its stand after the failed vote, they said ‘It was clear that the tentative agreement we had with the IAM leadership was not palatable to the members’, it added that the company is ready and willing to change its relationship with the employees and the union, and move back into new negotiations to get a new deal.

This walkout is a big blow to Boeing’s new CEO, Kelly Ortberg who took over the leadership of the firm less than a month ago. Before the vote, Ortberg had urged the workforce to reject the strike saying that Boeing needed to get back on its feet. As it is however for the company, this strike forms part of the many challenges that his leadership faces in a bid to transform the fortunes of the business entity.

Financial and Reputational Consequences

This is the worst time that Boeing could have faced the strike. Even now the company is in big trouble with the constant problems connected to the limitation of the 737 MAX production that was approved by the US Federal Aviation Administration and the further potential loss-making seems rather probable. It is expected that if the shutdowns persist for longer periods, then businesses and their suppliers could lose billions.

Past labor relations have not been very fruitful to Boeing as it has cost them a lot of money in the past. The last strike was in 2008 which comprised 8 weeks and it affected the company comprising an estimated $ 1. 5 billion per month average, according to information that was gotten from Moody’s Credit Rating Agency.

Breakdown in Trust

An important factor that has played out in this strike is the lack of trust between Boeing’s management, the union leadership, and the employees. Although Boeing appears to be longing to go back to the bargaining table, the workers turned down the tentative deal suggesting that the offer being proffered is below their expectations.

Anger is also directed towards own union leadership which had encouraged the members to pass the deal. Nevertheless, even though the leadership of the union described the contract as the best to ever be signed with the company, the members were unfazed, which points to a gap between the union and the rank-and-file.

Impact on Aviation Industry

The consequences that were borne out of this strike do not only affect Boeing because airlines across the globe rely on the new airplanes. Greg Waldron, Asia Managing Editor at FlightGlobal, said, “It is never good to have a strike – at least from the management perspective- but the current situation makes it even more dicey.” Airlines that ordered Boeing’s 737 Max will be anxiously observing the unfolding event as delays are not good for their business not to mention the rest of the aviation sector.

Boeing’s Ongoing Legal Troubles

Worse still, Boeing company has had its fair share of legal problems associated with the recent safety complications. Boeing was said to pay a criminal fine of $244 million in July after fraud charges that are linked to the two fatal 737 MAX crashes that happened over five years ago. These accidents that claimed the lives of 346 individuals have caused a lot of damage to Boeing’s reputation in the aviation industry.

Apart from the accidents that led to the 737 Max grounding Boeing Company has been facing lawsuits and regulatory probes such as in January when the door plug of an Alaska Airlines plane exploded mid-flight. More legal and financial battles threaten the future of Ortberg hence what awaits the company is a formidable challenge to being steadied.

Seems that Boeing has a Long Road Ahead

In addition to that, Boeing’s future will be determined by problems such as issues that arose from this strike, legal disputes, and safety malaises. The process of reconciliation lies in protracted bargaining, and any more stale prolongation of the conflict will merely complicate Boeing’s mission to regain consumer and workers’ confidence as well as reestablish its standing in the international aviation market.

Although Boeing has an interest in getting back to bargaining, it is still unknown for how long this strike will come to an end or the further Boeing has to offer to meet their employees’ demands and ensure the continuation of manufacturing processes.

Conclusion

Boeing workers’ strike, which followed the rejection of the 25% pay rise is a serious hurdle to the company’s resurgence. The strike not only threatens Boeing’s financial outlook, but also reveals problems within the company’s faith in the management, its employees, and their unions. As one can expect, the result of this work stoppage will be a key determinant for Boeing and how the company will be able to manage its ongoing calamity and competitiveness in the international aerospace market.