Boeing postpones strike on three defense plants for now

by magbia Business

The International Association of Machinists and Aerospace Workers said an overnight bargaining session led to Boeing’s new offer and workers will vote on Wednesday whether to accept it.

Under the new contract offer, employees can choose to receive an $8,000 lump sum payment — minus tax withholding — upon ratification or choose to deposit the full amount into a 401(k) plan. The company is dropping its revised 401(k) match offer.

“This new proposal builds on our previous strong, highly competitive one and directly addresses the issues raised by our employees. We expect them to vote yes on Wednesday,” Boeing said in a statement Saturday.

A temporary deal does not mean the risk of a strike is gone. Several companies have struck deals with union leadership, only to see rank-and-file workers reject the proposed contract, forcing a strike. That’s what happened at John Deere, where 10,000 members of the United Auto Workers union went on strike in October after rejecting a tentative deal. They went on strike for five weeks, rejecting another tentative agreement along the way, before voting in favor of a third agreement and returning to work.

Union members at three Boeing defense plants overwhelmingly rejected the company’s previous proposal a week ago.

Workers at three plants in Missouri and Illinois manufacture the F-15, F-18, T-7A trainer and MQ-25 unmanned refueler. Boeing said on July 24 that it was activating a contingency plan in the event of a strike. But CEO Dave Calhoun told investors during a conference call this week that deliveries to military customers would be delayed if the strike did occur.

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The standoff began after the union criticized Boeing’s 401(k) payments in the contract and workers rejected the offer.

“Boeing previously took away pensions from our members, and now the company is unwilling to adequately compensate our members’ 401(k) plans,” the union said on July 24.

Boeing’s first 401(k) proposal on Sunday included a company match of employee contributions to employees, with automatic contributions of 2% for 2023 and 2024, as well as contributions of up to 10% of employees’ wages. Boeing also offered a ratification bonus of $3,000.

Boeing currently offers a 4% company contribution and a 75% match on the first 8% of an employee contribution.

Boeing has reported deep losses in each of the past three years, with net losses exceeding $18 billion since the start of 2019. But those losses were primarily related to its commercial aircraft business, which has been hit by the 20-month 737 MAX grounding. Which began after two fatal accidents in March 2019 as well as a sharp drop in demand for air travel due to the pandemic.
The company’s defence, space and security business units generated $1.5 billion in profit each over the past two years. But Boeing reported a loss of $929 million in its defense business in the first quarter of this year after several special charges, including $660 million related to the refurbishment of two 747 jets to be used as new Air Force ones. Fee is included. Boeing posted a narrow profit of $71 million in the second quarter.

– CNN Business’ Chris Isidore contributed to this report