Workers at a Boeing plant on the US west coast left their jobs after overwhelmingly rejecting a contract deal, according to Reuters.
The growing crisis hit Boeing shares and prompted a management coup. The company’s shares fell 3.4 per cent in pre-market trading in the US on Friday.
New CEO Kelly Ortberg is facing a battle between unions and management just weeks after being invited to restore faith in the aircraft manufacturer. He offered a deal including a 25 per cent pay rise over four years, well below 40 per cent workers had demanded.
About 30,000 members of the International Association of Machinists and Aerospace Workers (IAM), which produces the 737 MAX and other Boeing jets in Seattle and Portland, voted for the first full-fledged contract in 16 years. In a two-part vote, 96 per cent rejected it and favoured industrial action.
Back to negotiating table
A protracted strike could severely hit Boeing’s finances facing $60 billion in debt. Boeing said Thursday night that the vote sent a clear message that the tentative agreement reached with IAM management was unacceptable to members.
We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.
The proposed deal also included a $3,000 signing bonus and a promise to build Boeing’s next commercial aircraft in the Seattle area, provided the programme is launched within four years of the contract.
Jon Holden, who headed the negotiations for Boeing’s largest union, stated:
We’re going to get back to the table as quickly as we can. This is something that we take one day at a time, one week at a time.
If the strike lasts, it will also put pressure on airlines that depend on that manufacturer’s planes and suppliers that make parts and components for its planes.
A 50-day strike could cost Boeing between $3bn and $3.5bn in cash, according to a TD Cowen pre-vote note. The last strike by Boeing workers in 2008 shut down plants for 52 days, resulting in a $100 million a day drop in revenue.
