Union leaders and Boeing have reached an agreement in principle to end the strike that has paralyzed production of the aerospace giant’s main aircraft for more than a month, as announced by the union, the International Association of Machinists and Aerospace Workers. (AFL-CIO), through its website. To unblock the conflict, the company has agreed to a salary increase of almost 40% in the four years of validity of the new collective agreement.
The pact has been achieved with the mediation of Julie Su, the Secretary of Transportation of Joe Biden’s Government, but must still be ratified by the workers, who rejected a first agreement with 95% of votes against. This includes substantial improvements, including salary increases, the reintroduction of an incentive plan and an increase in company contributions to pension plans. It will be put to the vote next Friday. As happened in the automobile sector, workers are resentful after years of paltry salary increases while managers earned multimillion-dollar figures.
The salary increase included in the agreement that was rejected was 25% over four years. Now, it is an increase of almost 40%, also in that period: 12% in the first year; 8%, in the second and third, and 7% in the fourth. Although the union highlights the sum of the percentages and speaks of a 35% increase, in reality, when accumulated, it is a compound salary increase of 39.78%, as it also recognizes in the fine print.
The strike, which began on September 13, extends across the entire west coast of the United States and has forced Boeing to close the assembly lines of its 737 Max, 767 and 777 airplanes, the ones that generate the most cash for the company. It occurs at a time when Boeing is going through a major crisis, in which safety and cost problems have put the company on the ropes. The strike, affecting about 33,000 workers, is the first major labor dispute at Boeing in 16 years.
Boeing’s new CEO, Kelly Ortberg, has decided to take drastic measures to cut the company’s costs. Last week announced its intention to cut the workforce by 10%, which means dispensing with around 17,000 employees between layoffs and uncovered sick leave.
Boeing advance which closed the third quarter with a cash position and investments in marketable securities of 10.5 billion, a critical position given the stoppage of production. The company warned that it will close the third quarter with losses of $9.97 per share, which means red numbers for the company as a whole of about $6.1 billion in three months. In the first half of the year, the company lost about 1.8 billion dollars. Since 2019, it has accumulated losses amounting to around $30 billion.
The company announced this Tuesday to the United States Securities and Exchange Commission (the SEC) the signing of a loan of 10,000 million dollars (about 9,200 million euros) and registered a brochure to issue shares, convertible debt and other securities for an additional $25 billion to ensure access to liquidity while it straightens course.
The probable end of the Boeing strike is good news for Joe Biden’s Government and, indirectly, for Kamala Harris as a Democratic candidate. After 45 consecutive months of job creation, it is feared that the impact of the strike and that of the hurricanes that have hit the southeastern United States could cause jobs to be lost in October for the first time in the entire mandate of the current Government. The figures will be known on November 1, just four days before the election.
