Boeing, union ‘really far apart’ weeks ahead of possible strike

Boeing Co. and its largest union remain at odds on major issues in contract talks as a possible strike looms that could cripple production of its cash-cow 737 Max jetliner next month.

The two sides are “really far apart” on wages, job security and other matters, said Jon Holden, president of the International Association of Machinists and Aerospace Workers district that represents roughly 33,000 Boeing factory workers. 

“It’s a tough slog,” Holden said in an interview. “We’re very aggressive in our proposals on wages, retirement, health care, job security, paid time-off. We’re not close on the big issues.”

Negotiators for the planemaker and the IAM District 751 are holed up in a Seattle hotel to hash out their first comprehensive contract in 16 years before the current deal expires at midnight local time on Sept. 12. Without a new agreement, Boeing faces a walkout that could shut down its Puget Sound factories, jeopardizing efforts to boost jetliner output following a near-catastrophe that exposed lax quality controls and manufacturing shortfalls.

Holden’s team wants Boeing to commit to building its next jet in the Seattle area and has demanded a 40% pay raise over three years. The union is also pushing to have more say in safety and quality. It’s been emboldened by a resurgent US labor movement, a scarcity of skilled aerospace mechanics and pressure on Boeing to stabilize work in its factories. There have been “slight” improvements in the company’s offers over wages during the past week, but more is needed, Holden said.

“We continue to bargain in good faith as we focus on the topics that are important to our employees and their families,” Boeing said in an emailed statement. “We’re confident we can reach a deal that balances the needs of our employees and the business realities we face as a company.”

Boeing Machinists last month voted overwhelmingly to authorize a strike alongside a rally that attracted 25,000 workers and their families to Seattle’s T-Mobile Park. Factory work across the region has since been interrupted by raucous daily marches, punctuated by chants and horns in a display of union solidarity.

Union members are slated to vote Sept. 12 on the company’s best and final offer. If the deal is rejected, workers will vote on whether to strike, and head to picket lines at 12:01 a.m. on Sept. 13 if two-thirds support a walkout.

Regaining a steady production tempo is key to reversing Boeing’s cash burn that has consumed more than $8 billion so far this year. Kelly Ortberg, Boeing’s new chief executive officer, has sought to strike a conciliatory tone with the Machinists since he joined the company on Aug. 8. He announced plans to work from Seattle, and during a brief meeting with Holden emphasized his desire to improve relations with the union, which represents workers in Seattle and Portland, Oregon.

“They’re both good leaders,” said Richard Aboulafia, a managing director at consultancy AeroDynamic Advisory. “You’d hope that given the requirement here that two good leaders could find the necessary common ground to avoid the strike.”

In an Aug. 23 video update on the talks, Kim Pastega, a member of Boeing’s negotiating team, said the company is “100% committed” to reaching an agreement that is good for both employees and the company’s future.

“We truly are making progress, having productive and collaborative conversations with the union,” said Pastega, a vice president for manufacturing and safety with Boeing’s commercial airplane division.

In the interview, Holden said he hasn’t noticed any change in tone at the bargaining table since the new CEO took over from Dave Calhoun, who announced he was stepping down in March amid a broad shake-up.

“I do believe they have leadership now,” Holden said of Ortberg. “I don’t know how involved he is. But I know he is keeping tabs — at least that’s what I’ve been told.”

The Machinists have a history of activism dating back decades, including a 2008 strike that shut down Boeing’s airplane production for two months. Leaders are still smarting over a 2014 deal that sacrificed pensions, locked in minimal raises and tied the hands of activists for a decade in exchange for a Boeing pledge to building the 777X jet in the region. 

“Even though we’re far off, I haven’t given up,” Holden said. “I have over 33,000 families and their livelihoods at stake. I want to reach a deal. But we are willing to strike.”