Boeing is giving the union representing striking factory workers more time to consider a revised contract offer with bigger pay increases and more bonus money, but it was unclear Tuesday whether the union would schedule a ratification vote on the proposal.
On picket lines in the Pacific Northwest, strikers said the company’s latest offer wasn't good enough. Both the union and many of its members complained about the way Boeing bypassed the union in publicizing the offer, with some workers saying it was an unfair attempt to make them look greedy.
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Boeing's new “best and final” offer includes pay raises of 30% over four years, up from 25% in a deal that 33,000 members of the International Association of Machinists and Aerospace Workers overwhelmingly rejected when they voted to strike. The union originally demanded 40% over three years.
In the face of opposition from the union, Boeing backed down Tuesday from a demand that workers vote on the new offer by Friday night, but the company still wants a vote.
“This strike is affecting our team and our communities, and we believe our employees should have the opportunity to vote on our offer that makes significant improvements in wages and benefits,” the company said in a statement.
The new offer seemed to have little support among strikers. Daniel Dias, a test technician at Boeing for the last six years, wasn’t bowled over.
“A 5% increase (from the previous offer)? It’s not enough. My mortgage is $4,000. I went to Safeway yesterday to get breakfast, and it cost me $62" in groceries, Dias said.
Som Dom, an electrician with 17 years at Boeing's factory in Renton, Washington, said workers need better wages for the high cost of living in the Seattle area.
“We just want a fair deal. We’re not greedy," Dom said. “It’s tough to live in this state. You’ve got to make over $160,000, something like that, to buy a house. The new hires, they make $25, $26 an hour. So that (offer) isn’t going to be enough.”
Boeing officials told union representatives about their new offer Monday morning, a couple hours before announcing it to workers through the media.
“Boeing does not get to decide when or if you vote,” union officials told members late Monday. “This proposal does not go far enough to address your concerns, and Boeing has missed the mark with this proposal."
John Lentz, a Boeing electrician who joined co-workers in waving strike signs along a side road near the Renton factory, said the way Boeing bypassed union negotiators in announcing the offer “seems to be kind of shady there. We do have people that are in place to negotiate for us.”
Boeing said its latest offer includes upfront pay raises of 12% plus three annual raises of 6% each and would take the average annual pay for machinists from $75,608 now to $111,155 at the end of the four-year contract.
It also would keep annual bonuses based on productivity. In the rejected contract, Boeing sought to replace those payouts with new contributions to retirement accounts.
John Reifel, who has spent nearly 25 years at Boeing, said the company was trying to make the strikers look unreasonable when they are only seeking to negotiate a contract for the first time in more than a decade.
“We build a product that people’s lives depend on,” Reifel said. “There will be plenty of bonus money to go around for upper-level and mid-level and first-level managers and all that, but if we don’t build it, there’s no product. And we work hard.”
The two sides have not held formal negotiations in nearly a week, since two days of sessions led by federal mediators broke off.
Boeing, which has encountered serious financial, legal and mechanical challenges this year, is eager to end the 12-day-old walkout that has halted production of its best-selling airline planes.
Cai von Rumohr, an aviation analyst at financial services firm TD Cowen, said Boeing's decision to make its latest offer in the absence of additional bargaining sessions put a proposed second ratification vote in doubt.
“If it fails, it should prompt union leadership to reengage in serious negotiations," he said. However, union leadership's support for Boeing's previous offer — which lost in a 96% strike vote — raises questions about the union's ability to win support for the new, improved offer, he said.
The strike has shut down production of Boeing 737s, 767s and 777s and is causing the company to make cost-cutting moves, including rolling temporary furloughs for thousands of nonunion managers and employees.
Boeing has lost more than $25 billion since the start of 2019 and fallen far behind rival Airbus in orders and deliveries of planes to airline customers. It needs to deliver more planes to bring in cash, but federal regulators are limiting production of 737s — Boeing's best-selling plane — to 38 per month until the company improves its quality-control process. Boeing was producing fewer than 38 before the strike.
The downturn started after two deadly crashes involving Boeing 737 Max jets, and worsened after a panel called a door plug blew off another Max during an Alaska Airlines flight in January.
Boeing’s critics, including some whistleblowers from inside the company, claim Boeing cut corners during production and put profits above safety.
The head of the Federal Aviation Administration, Boeing’s regulator, said Tuesday that while it is not his job to assess Boeing’s finances, giving too little attention to safety has not turned out well for the company.
“Even if profits were your No. 1 goal, safety really needs to be your No. 1 goal because it’s hard to be profitable if you’re not safe, and I think Boeing certainly has learned that,” FAA Administrator Mike Whitaker said during a U.S. House subcommittee hearing. “Whatever money might have been saved has certainly been lost in the fallout.”
Whitaker, who previously acknowledged his agency's oversight of Boeing wasn’t strong enough, told lawmakers that since Boeing submitted a plan to improve its manufacturing in late May, “They have been trending in the right direction.”
Still, he said, it will take years for Boeing to fully change its safety system and culture.
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Koenig reported from Dallas.