Boeing and Union Reach a Deal After Lengthy Strike

Boeing and the union representing about 33,000 Boeing employees in Washington State finally reached an agreement to end a lengthy strike.[i] The strike began over a month ago when workers rejected a proposed contract that would raise their wages by twenty-five percent over the next four years. Workers demanded a forty percent increase over three years and a restoration of pension benefits that were eliminated about a decade ago in 2014. Since the start of strikes, Boeing had offered a thirty percent increase in wages which the union rejected, holding fast to their forty percent demand.[ii] The deal that was finally reached will raise wages thirty-eight percent over four years. The contract also includes a $12,000 ratification bonus and a performance bonus.[iii] Although the deal does not restore pension benefits, it calls for improved retirement benefits.[iv]

This strike came at a time when Boeing, a pillar of American industry, faced economic challenges, negative publicity and lots of transition. Back in January, a door fell off of a Boeing plane mid-flight prompting concerns from the FAA and the public at large.[v] In July, Boeing plead guilty to conspiracy to defraud the US government by misleading regulators who approved pilot-training standards for one of their airplane models, the 737 Max. The Max was involved in deadly crashes in 2018 and 2019 that took the lives of 346 people. Boeing appointed a new CEO in August.[vi]

Since the start of 2024, Boeing stock has fallen about forty percent and the strike had potential to compound these losses. S&P, a financial analytics firm, wrote in regard to Boeing, “We estimate the company will incur a cash outflow of approximately $10 billion in 2024, due in part to working capital buildup to support manufacturing process overhaul and costs associated with the strike,”[vii]

With the company struggling this year, is it fair to say that the recent strike and demands from the union were opportunistic? It is doubtless that the strike puts immense pressure on a company experiencing a particularly turbulent year. Additionally, while this strike had been focused in the Pacific Northwest, nearly half of Boeing’s 150,000 U.S. employees work in Washington State.[viii] So, it is very possible that the union took advantage of Boeing’s recent struggles to put the company in a difficult position.

However, opportunistic striking is not out of the ordinary and such opportunism places increased pressure on employers who, for the most part, have more bargaining power than their union counterparts under existing law. The recent strike of dockworkers incited concerns over its effect on the holiday season and how shipping routes would need to be changed to adjust to the strike amid the increased demand of the season.[ix] The strike ended when the dockworkers’ union and their employers were able to reach a deal with the employer meeting the union’s wage increase demands.[x] So, it may have been that the strike was timed in a way to place pressure on the dockworkers’ employers in a way that got the right result for them.

Opportunistic or not, many of the Boeing strikers’ concerns were answered. Strikers can now return to work with the promise of better wages and improved retirement benefits and Boeing can begin the process of bouncing back from a difficult year and gaining back public trust.

The strikers may have also felt encouraged and led to this path by the success of the aforementioned dockworkers as well as the success of the United Auto Workers and SAG-AFTRA strikes last year.[xi] The so called, summer of strikes has passed, but unions are acting and leaning in to conflict. It is notable that unions now represent 6 percent of the private sector as of 2023 whereas they represented 24.2 percent in 1973.[xii] With unemployment so low, is labor finally regaining some power?

We have no conclusions on this point, but at BLG we are keeping our eyes on these developments with interest. Notably, a trend towards worker rights in a union context tends to also result in greater worker rights overall – that is workers without unions get to ride the coattails of union success.[xiii]

[1] https://apnews.com/article/boeing-contract-vote-strike-machinists-union-5237a31660b0a06381457e33f9a72369#

[1] https://apnews.com/article/boeing-strike-machinists-contract-9f61a7d48675d1c3517233d40d4ec2b1

[1] https://apnews.com/article/boeing-contract-vote-strike-machinists-union-5237a31660b0a06381457e33f9a72369#

[1] https://www.nytimes.com/2024/11/04/business/boeing-union-new-contract-strike.html

[1] https://www.nbcnews.com/news/us-news/faa-investigate-boeing-door-plug-falls-alaska-airlines-plane-midair-rcna133491

[1] https://apnews.com/article/boeing-strike-manufacturing-reputation-3eed69b839021b24bfe792080c85b63c

[1] https://apnews.com/article/boeing-strike-workers-union-pay-e50b65fbbf34e74b42d4a65ef0d7da76

[1] https://www.nytimes.com/2024/09/13/business/economy/boeing-strike-union-contract.html

[1] https://www.reuters.com/business/retail-consumer/us-retailers-rush-holiday-imports-fearing-strikes-disruptions-2024-08-09/; https://www.asbn.com/articles/dockworkers-strike-threatens-holiday-shopping-season-and-small-businesses/; https://fortune.com/2024/09/29/dockworkers-strike-east-coast-retailers-product-delays-holiday-shopping/

[1] https://www.cnn.com/2024/10/04/business/port-strike-ends-whats-next/index.html

[1] https://www.sagaftrastrike.org/; https://www.npr.org/2023/11/12/1211602392/uaw-auto-strike-deals-ratified-big-three-shawn-fain

[1] https://www.unionstats.com/