Boeing Workers Reject Contract, Vote For Strike; 737 MAX Production In Limbo

Nearly 30,000 of Boeing's U.S. West Coast workers have overwhelmingly voted to strike for better pay and benefits. The mass strike, which led to the halt in production of the company's best-selling jet 737 MAX, comes at a time when the aircraft maker is already reeling from ongoing struggles, including production delays, safety issues, and mounting debt.

Boeing's production line in the Seattle and Portland areas will be at an impasse as thousands of workers joined the demonstrations, rejecting a proposed contract that failed to meet their demands.

The contract offered general wage increase of 25%, a $3,000 signing bonus, and a commitment to build Boeing's next commercial jet in the Seattle area within four years. However, the workers deemed it insufficient, Reuters reported.

International Association of Machinists and Aerospace Workers (IAM) members overwhelmingly rejected the proposed contract, with 94.6% voting no and 96% backing a strike. This sets the stage for a pivotal test of new CEO Kelly Ortberg's leadership skills.

The strike will begin on Friday, just weeks after Ortberg took the helm as CEO in August-- an appointment aimed at reinstating faith in the company after the federal government halted the production of Boeing 737 MAX 9 aircraft in January due to a door panel detaching in mid-air from a nearly new 737 MAX jet mid-flight.

"We are incredibly proud of the hard work and dedication shown by the negotiating teams from District 751 and W24 and the unwavering solidarity of our membership. Their tireless efforts have been on display throughout this entire process. Now, they will regroup and begin planning the next steps on securing an agreement that our membership can approve," IAM said in a statement.

The IAM is one of North America's largest and most diverse industrial trade unions, representing approximately 600,000 active and retired members in the aerospace, defense, airlines, railroad, transit, healthcare, automotive, and other industries.

Boeing's stock rose 0.9% on Thursday, but its shares are still down 36% this year due to safety concerns, production issues, and a $60 billion debt burden. The strike poses a significant threat to Boeing as the airline struggles to rebound from longstanding financial and safety woes, with analysts warning of a potential $1 billion weekly loss, reported the Washington Post.

The work stoppage might have a significant impact on Boeing as the union is essential to make some of its best-selling aircraft.

Boeing floated the contract after months of rigorous consulting sessions. The company had proposed to build its next new aircraft in Washington state, a key union demand. Both sides and investors have lavished praise on the deal, but its rejection by workers has now left its fate hanging by a thread.

With chants of "Strike! Strike! Strike!" echoing through the union hall, the stage is set for a potentially prolonged and contentious labor dispute that will test the mettle of Ortberg and the entire Boeing organization.

"We will make every resource available for our District 751 and W24 members during this challenging time. IAM members from across North America stand in solidarity with our members in the Pacific Northwest and California. Our goal is to get a strong contract that meets the needs of our members," IAM added.