On September 13, 2024, in Renton, Washington, USA, workers at the Boeing plant gathered on a picket line near the entrance to the production facility on the first day of the strike.
Matt Mills McKnight | Matt Mills McKnight Reuters
Renton, Wash. — Cash shortage boeing company Machinists continue to go on strike as workers demand higher wages, leading to rising costs. The cost of failing to reach a deal could be even higher.
In the shadow of a factory outside Seattle where the company builds its best-selling planes, Boeing mechanics on picket lines told CNBC they have saved money and have or are considering taking on side jobs like landscaping, furniture moving or warehouse work to make ends meet. break even.
Boeing's shutdown of factory workers in the Pacific Northwest has entered its second week. The financial cost of a strike at Boeing depends on how long it lasts, although ratings agencies have warned the company could face a downgrade if the strike lasts too long.
That will increase borrowing costs for the company, which already has $60 billion in debt. In January this year, a near-catastrophic door jam burst incident on a Boeing 737 Max aircraft, causing losses of approximately US$8 billion so far this year.
Boeing has not posted an annual profit since 2018 and its new CEO, Kelly Ortberg, is trying to restore the company's reputation after months of manufacturing crises that slowed deliveries to customers and left cash Also deprived.
Boeing 737 Max aircraft parked at Renton Airport in Washington state.
Leslie Josephs | CNBC
At the local union office in Renton, machinists are preparing for what could be a lengthy strike: Union members carry large pallets of bottled water while someone mixes a giant tuna salad in the kitchen to make sandwiches for workers . Union vans visited demonstration sites around Renton to provide picket workers with transportation to restrooms. Burning barrels provided heat for cold overnight pickets.
Many workers spoke of their love for their jobs but were concerned about the high cost of living in the Seattle area, where Boeing builds most of its planes.
As of 2023, Washington state's median home price has risen about 142% to $613,000, up from $253,800 10 years ago, according to the state's Office of Financial Management. That exceeds a national increase of about 55% during the same period, according to the St. Louis Federal Reserve.
“We can’t afford a house,” said Jake Meyer, a Boeing machinist who will start driving for a food delivery service during the strike and is considering doing odd jobs such as moving furniture. Meyer said that although he pushed for higher wages from Boeing, he enjoyed his job building airplanes.
“I'm proud of my work,” he said.
Another Boeing mechanic said he had been saving for months, giving up things like a restaurant and paying off his mortgage three months early.
“How long can I last,” said the worker, who asked not to be named.
$50 million per day
The strike comes after more than 30,000 Boeing mechanics rejected the temporary labor agreement at midnight on September 13 with nearly 95 percent of the vote, with 96 percent voting in favor of a strike. They received their last paycheck Thursday and health benefits will end Sept. 30.
Bank of America aerospace analyst Ron Epstein estimates the strike is costing Boeing about $50 million a day. The strike, which has halted production of most of Boeing's planes, has rippled through the aerospace giant's vast network of suppliers, some of which have been told to stop shipments. Boeing still produces the 787 Dreamliner at a non-union plant in South Carolina.
Boeing machinists union members count votes to accept or reject a proposed contract between Boeing and union leaders and whether to strike if the contract is rejected at the Aerospace Machinists Union Hall on September 12, 2024 in Seattle, Washington .
Jason Redmond | AFP | Getty Images
The fight is between a beleaguered Boeing Co. and a workforce seeking pay raises and other improvements. Boeing's latest offer, which includes a general 25 percent pay increase over the four-year deal, was endorsed by the machinists union and the International Association of Machinists and Aerospace Workers District 751.
Workers say they want a pay rise close to the 40% proposed by the union, as well as annual bonuses and the restoration of superannuation benefits lost more than a decade ago.
Boeing and the unions were at the bargaining table this week, but both Boeing and union negotiators said they were disappointed with the lack of progress.
“We continue to prioritize the issues you defined in the recent survey, but we are deeply concerned that the company is not addressing your top concerns,” union negotiators wrote to members on Wednesday. “Today's negotiations did not yield any meaningful progress.” .
Ortberg, who took office just six weeks ago, announced Tens of thousands of Boeing employees, including managers and executives, were furloughed this week after announcing a hiring freeze and other cost-cutting measures.
“During this week's mediation process with the union, we continue to work in good faith to engage the union bargaining committee in meaningful negotiations to address the concerns we are hearing from our team,” Ortberg said in a note to employees Friday. Give feedback.
“While we are disappointed that discussions have not progressed further, we remain very committed to reaching an agreement as quickly as possible that recognizes the hard work of our employees and ends the shutdown in the Pacific Northwest,” Ortberg wrote.
The strike, which includes Boeing mechanics in the Seattle area, Oregon and elsewhere, is just the latest in a series of labor fights in recent years that have targeted actors, autoworkers, port workers and airline employees, all of whom The victory was won.
The Biden administration is encouraging Boeing and unions to reach a deal.
Transportation Secretary Pete Buttigieg said: “I do believe that both sides want a solution here and want to see a solution that makes sense for workers and for a company that really needs to work in many areas Companies that find a way forward will benefit.
labor market tight
Boeing is facing a tight labor market. The last strike, in 2008, lasted less than two months, when the company was in better financial shape and there was less competition for jobs in the area.
One Boeing supplier told CNBC that furloughing or laying off employees will cause problems in the coming months because it takes so long to train employees for such technical and detailed work.
Boeing and its suppliers have laid off thousands of employees during the epidemic. They have since struggled to hire and train staff in time for a resurgence in air travel and aircraft demand.
“We’re in an environment now where it’s hard to get a skilled technical workforce, especially in aerospace and defense,” said Bank of America’s Epstein. “So what do you do to not only retain them but attract them? What if? They really want the pensions and maybe that gives you a competitive advantage over those who are trying to attract talent.”