Boeing workers agree pay deal, end strike

5th Nov 2024 14:34

(Sharecast News) - Boeing's workforce ended a 53-day strike on Tuesday, after voting to accept a new labour agreement that included a 38% pay increase over four years and improved retirement contributions.

The deal, approved by 59% of union members, allowed Boeing's 33,000 striking machinists to return to work, marking a major win for both the company and its new chief executive Kelly Ortberg, as it seeks to recover from a series of recent crises.

The International Association of Machinists and Aerospace Workers (IAM) pushed for significant pay hikes and retirement benefits, though it could not secure the return of a defined-benefit pension plan, a point of contention for many workers.

Union president Jon Holden acknowledged members' ongoing dissatisfaction over lost pension benefits, but emphasised the gains achieved, including a $12,000 signing bonus and an immediate 13% wage bump.

He stressed the importance of getting workers back on the factory floor, with production resuming as early as Wednesday.

The strike had weighed heavily on Boeing's finances, costing an estimated $100m per day in lost revenue.

To address mounting financial strain, Boeing raised over $24bn in capital to stave off a potential downgrade of its credit rating.

While the funding offered short-term stability, analysts expected Boeing's wage costs to rise by $1.1bn under the new contract.

Furthermore, production would likely resume gradually, with delays expected in fulfilling Boeing's extensive aircraft backlog.

Ortberg, who took the helm just five weeks before the strike began, welcomed the resolution as a step toward strengthening Boeing's internal culture and relationships with union members.

US President Joe Biden also praised the agreement, emphasising its role in supporting American economic growth.

The strike disrupted supply chains across Boeing's vast network of suppliers, affecting more than 44,000 jobs.

Airlines, including Ryanair, experienced delivery delays, adding to existing challenges for Boeing, which had struggled with safety concerns and production issues over recent years. At 0930 EST (1430 GMT), shares in the Boeing Company were up 0.95% in New York, at $156.55.

Reporting by Josh White for Sharecast.com.