Boeing proposes 35% pay hike, $7,000 bonus to end strike
Boeing has offered a tentative deal to its striking workers in the Seattle area, hoping to end the strike that has continued for over a month. The aerospace manufacturer confirmed the deal includes a 35% pay raise over four years, and a one-time signing bonus of $7,000. Union members will vote on the proposal on Wednesday. The strike began on September 13 over pay and other compensation issues.
Strike disrupts operations and production
The strike involved some 33,000 unionized workers, mostly in Washington state. The labor action brought operations at two Seattle-area assembly plants to a standstill, and affected the production of Boeing's 737 MAX planes. The workers were demanding huge wage hikes and other benefits, citing over a decade of stagnant wages amid rising inflation. Earlier, the union had demanded a 40% pay raise from Boeing.
Boeing's revised offer and unmet demands
Boeing's first offer was a 25% raise, which was later raised to 30%. However, the union had aimed for a 40% hike. The workers were also pushing for the reinstatement of an employer-paid pension plan that Boeing scrapped in 2014. While the new proposal doesn't restore this traditional pension plan, it promises to boost contributions to 401(k) retirement plans and keep performance bonuses at a minimum of 4% of pay.
Strike's financial toll and Boeing's future plans
The strike has reportedly led to an estimated $7.6 billion in direct losses, including a minimum of $4.35 billion for Boeing and nearly $2 billion for its suppliers. Faced with these challenges, Boeing recently announced plans to boost its cash flow, including raising up to $25 billion. The company also revealed plans to cut its workforce by 10% due to a projected massive third-quarter loss after the labor action.
Boeing delays 777X delivery, suppliers feel the pinch
As a result of the strike, Boeing has pushed back the first delivery of its 777X plane to 2026 from 2025. The jet was originally set to enter service in January 2020. The strike has also impacted Boeing's suppliers. Spirit AeroSystems, which makes fuselages and other components for Boeing planes, said it will place 700 workers on three-week furloughs starting later this month amid the ongoing labor dispute at Boeing.
