The seven week long strike has finally come to an end.
On November 4th local time, workers at Boeing's West Coast factory in the United States voted on the improved contract proposal.
Subsequently, the IAM union, representing over 33000 Boeing mechanics in the Seattle area, voted with 59% approval to accept Boeing's proposed four-year pay raise of 38%. This means that the nearly two month long strike action will end and workers are expected to return to work on Wednesday.
The International Association of Machinists and Aerospace Workers (IAM) recently stated that if the proposal is passed, workers can return to work as early as this Wednesday local time and no later than November 12th.
According to the new four-year contract announced on Boeing's official website, employees will receive a 38% salary increase over four years and an approved bonus of $12000. In terms of the 401 (k) pension plan, the company promises to match 100% of employees' top 8% salary contributions and automatically pay 4% of the company's contributions.
Most of these mechanics work on the 737 MAX, 767, and 777 production lines. The two month long strike action has led to the temporary shutdown of multiple Boeing models. It is believed that the strike has caused Boeing to lose $100 million per day. As a response to the shutdown and strike, Boeing raised $24 billion from investors last week to avoid the company's credit rating not being downgraded.
Previously, Boeing faced the risk of being downgraded to junk status by S&P, as the company continued to be affected by ongoing strikes and S&P placed the aircraft manufacturer on a credit watch list for possible downgrade. On October 8th, S&P stated in a statement that the fourth week of the Boeing mechanics union strike has increased the company's financial risk, estimating that Boeing will face approximately $10 billion in cash outflows this year.
Another rating agency, Moody's, stated in September that it is evaluating the "duration of the strike and its impact on cash flow, as well as the potential equity financing that Boeing may undertake to enhance liquidity," and may downgrade its rating. In April, Moody's downgraded Boeing's credit rating to Baa3, just one step away from being rated as "junk".
It is reported that the Boeing strike began on September 13th, and before the salary increase proposal was accepted, the IAM union had rejected two consecutive salary increase proposals from Boeing.
Civil aviation expert Li Hanming analyzed that strikes by industrial workers in the United States are not a new phenomenon and have become a means of collective wage bargaining. The direct cause of the Boeing strike is that the labor and management sides cannot reach an agreement on the salary increase: the labor side expects a 40% salary increase within four years (equivalent to an annual increase of 9% or an additional month's salary per year); The management is only willing to increase the salary by 25% (equivalent to an annual increase of 6%).
Under the long-term strike, Boeing announced on October 11th local time that it plans to cut 17000 jobs worldwide, with a layoff scale of 10% of current employees. The company also claimed that the strike of its mechanics has exacerbated the company's difficulties and that its business will face greater losses.
At the same time, Boeing also announced that it will postpone the production of the new model 777X to 2026 instead of the originally scheduled 2025, and will cease production of the 767 cargo aircraft in 2027 after completing existing orders.
In addition, Boeing's aviation manufacturing business also suffered consecutive failures in 2024. In January, a Boeing 737 Max series aircraft belonging to Alaska Airlines had a partial fuselage rupture, resulting in injuries to several people on board. As a result, 171 Boeing 737 Max 9 aircraft in the United States were grounded. In March, United Airlines Boeing planes experienced three more accidents within five days, including engine fires, tire detachment, and skidding off the runway.
CEO Otterberg stated that Boeing is at a crossroads, facing various issues such as production quality and huge debt. Serious performance mistakes have led to a loss of trust, an increase in debt, and customer disappointment.
Boeing's latest financial report released on October 23 local time showed that the company's quarterly revenue decreased by 1% year-on-year to $17.84 billion, slightly lower than analysts' expectations of $17.89 billion; The net loss was 6.174 billion US dollars, far exceeding the net loss of 1.638 billion US dollars in the same period last year; The non GAAP core operating loss was $5.989 billion, compared to a loss of $1.089 billion in the same period last year.
(Times Finance Weekly Comprehensive Self Interface News, Global Market Broadcast, Times Finance, CCTV News, Caixin News, 21st Century Business Herald, FATIII)