Boeing union says it will vote on new proposal to end strike

Leaders of Boeing’s largest union said Saturday that they had reached a “negotiated proposal” for a new contract and would put it up for a vote to end a long and expensive strike.

In a post on its website Saturday, the union said that “with the help of Acting U.S. Secretary of Labor Julie Su,” it had reached a deal that “warrants presenting to the members and is worthy of your consideration.”

The strike by the union’s more than 33,000 members, who mostly build commercial airplanes in the Seattle area, began Sept. 13 and has taken a notable toll on Boeing, which was already in difficult financial straits. Within days of the walkout, Boeing announced cost-cutting measures, including temporary furloughs for tens of thousands of white-collar employees.

The proposal, which was agreed to after multiple rounds of failed talks, would raise wages cumulatively by nearly 40% over the four-year life of the contract, according to details shared by the union. That is a significant increase over the previous proposal and close to the amount the union had initially sought. The deal also includes a bonus of $7,000 should workers ratify the deal, and the reinstatement of performance bonuses that were set to be cut.

The union, the International Association of Machinists and Aerospace Workers, said the vote on the proposal would take place Wednesday.

In a statement, Boeing said, “We look forward to our employees voting on the negotiated proposal.”

If members vote for the contract, it would replace one that was agreed to in 2008 after a two-month strike. Boeing later said in securities filings that the strike contributed to a decline in revenue that year of about $6.4 billion because it delivered 104 fewer planes than expected.

In its first week, the current strike cost the company at least $571 million, according to an analysis by Anderson Economic Group, a Michigan-based research and consulting firm.

The company said in regulatory filings Tuesday that it could raise as much as $25 billion by selling debt or stock over the next three years and that it had entered into a $10 billion credit agreement with a group of banks, an effort to improve its financial position as costs mounted. The company announced a restructuring this month that included plans to cut 17,000 jobs, or 10% of its workforce.

Washington state is home to most of Boeing’s commercial airplane production. It makes the 737 Max at a factory in Renton and the 767 and 777 in Everett. Boeing also produces the 787 Dreamliner at a factory in North Charleston, South Carolina, but workers there are not represented by a union.

The Max is by far Boeing’s most popular commercial plane, accounting for more than three-fourths of the approximately 5,500 planes in the company’s order book. But output is far lower than Boeing would like.

The company was forced to slow production of the jet to make quality improvements after a panel fell off a Max during an Alaska Airlines flight in January, renewing concerns about Boeing’s commitment to quality and safety five years after two fatal crashes involving the 737 Max.

Airline executives say they are pleased with progress Boeing has made since that January flight, but the strike represented a setback for the company and its new CEO, Kelly Ortberg, a former leader of aerospace supplier Rockwell Collins, who joined Boeing in August.

When they put the previous contract offer to a membership vote, union leaders described the proposal in glowing terms. That proposal included a 25% raise, an increase in 401(k) contributions from Boeing and a commitment to build a new commercial plane in the Seattle area. But more than 95% of members who voted on the deal rejected it.

When negotiations began in March, the union said it was seeking a 40% raise and the reinstatement of pension benefits lost nearly a decade ago, an important issue for many workers. Union members are also resentful of Boeing’s decision to move the assembly of the 787 from Washington to South Carolina.

Boeing employs more than 66,000 people in Washington, but supports more than twice as many jobs in the state when considering its effect on other businesses, according to the Seattle Metropolitan Chamber of Commerce. The company paused spending on parts after the strike began.

This article originally appeared in The New York Times.

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