Boeing (Photo: Bloomberg)
By Julie Johnsson and Ian Kullgren
Boeing Co.’s largest union started its first full contract talks in sixteen years with a bang by asking for a 40 percent pay increase over three years.
The International Association of Machinists also aims to reduce health care costs, restore pensions and get a long-term commitment from Boeing to build planes in the Pacific Northwest, said Jon Holden, president of the local District 751 chapter , who spoke Friday at the organization’s headquarters near Seattle. The union also sees a path to an agreement without a strike.
The company’s shares fell further after the union announced its demands, falling as much as 2.2 percent.
The negotiations are a test of organized labor’s continued influence as the U.S. labor market recovers from its post-pandemic highs. The talks will also determine whether American unions can continue to build on the victories of recent years, when the tight labor market gave them a lot of influence at the bargaining table.
IAM District 751 — which represents more than 32,000 mechanics in Washington and Oregon — is seeking to roll back wage and pension concessions that Boeing took from workers a decade ago during a contentious fight over a contract change. The planemaker is in a weaker position because of a tight market for skilled factory workers and financial and operational problems, especially in the wake of a near-catastrophe in January when a door flew off a Boeing plane during a flight.
“We’re in a very powerful position now,” Holden said. “We have leverage that is better than ever before in our history, and we are going to use it. Our members want us to take advantage of that.”
In a statement, Boeing said it would continue discussions “in good faith.” The company also said it is confident there is a path to a deal that meets employee needs and maintains its competitiveness.
Read more: Boeing talks will test unions’ influence as the labor market softens
With no new plane on the drawing board, Boeing has also lost some of the leverage it used to great effect in 2014 when it threatened to move production of the 777X from its traditional manufacturing base in Puget Sound.
“The stakes are enormous,” said Richard Aboulafia, director of AeroDynamic Advisory, an aerospace consultancy. Boeing was “foolish enough to think that it would always be to their advantage, that they would have the upper hand.”
The talks got underway on Friday when Holden and other union leaders formally presented their proposal to Mike Fitzsimmons, Boeing’s global head of labor relations, and his team. The proceedings were amicable, with the parties exchanging statements and talking about their relationship, Holden said.
In the coming months, approximately six subcommittees will discuss the proposal line by line. Negotiations typically start with less controversial, non-economic issues and later become more heated when it comes to compensation. But since it has been a long time since the last full talks, the union has proposals to address hundreds of issues, including work-life balance and non-pay issues, Holden said.
In addition, Holden defended the Boeing aircraft built by its members, which are under scrutiny after a panel blew out of an Alaska Airlines Airborne 737 Max in January. “We build safe airplanes,” Holden said. “Have there been any problems? Yes, but we are working on that.”
First print: March 9, 2024 | 8:11 am IST