Striking Boeing workers rejected a new contract. Here’s what happens next

Boeing machinists this week overwhelmingly rejected a contract proposal, opting to extend the weeklong strike and send negotiators back to the bargaining table.

Sixty-four percent of workers voted against the new contract, according to the International Association of Machinists and Aerospace Workers (IAM), the union representing 33,000 Boeing employees in Washington, Oregon and California.

The outcome follows the resounding defeat of an earlier proposal last month, which was criticized by more than 90% of union members.

The back-to-back “no” votes set the stage for a standoff between Boeing and its employees that will strain both parties’ finances in the coming days and weeks, experts told ABC News. That financial pressure will push the dispute toward a resolution, but it seems unlikely that workers will relent without major concessions, she added.

“The union has sent a very clear message to Boeing that it will take significantly more to reach a settlement,” Harley Shaiken, a professor emeritus at the University of California, Berkeley, who focuses on labor history, told ABC News.

The proposed contract would have provided a 35% increase over the four-year term of the contract, up from the cumulative 25% increase offered in an earlier bid that was overwhelmingly rejected in a vote last month. Workers had initially demanded a cumulative pay increase of 40%.

The proposal also called for an increase in Boeing’s contribution to a 401(k) plan, but declined to heed workers’ calls to restore the company’s defined benefit plan. The contract would have included a $7,000 ratification bonus for each employee, as well as a performance bonus that Boeing had wanted to jettison.

But union leaders said the concessions offered in the proposal were not enough to meet the demands of rank-and-file union members.

“This contract battle began more than a decade ago when the company went too far and created a wound that for many members may never heal,” Jon Holden, president of IAM District 751 in Seattle, said in a statement after the vote. “I don’t need to tell you all how challenging it has been for our membership with the pandemic, the crashes, massive inflation and the need to address the losses from the 2014 contract.”

Boeing did not immediately respond to ABC News’ request for comment.

Experts who spoke to ABC News predicted Boeing’s willingness to re-engage in talks and even re-examine key parts of the offering.

Hours before workers cast their votes Wednesday, Boeing released an earnings report that showed the company lost as much as $6.1 billion last quarter, even though most of that period occurred before the strike began.

The strike is expected to widen that financial gap. A 50-day work stoppage would cost Boeing $5.5 billion, investment bank TD Cowen said in a report reviewed by ABC News early in the dispute. So far the strike has lasted 41 days.

“This rejection adds further uncertainty, costs and recovery delays,” Bank of America Global Research said in a note to clients on Thursday. “We expect that further concessions on wages will be needed to reach a deal.”

Financial stress will also increase for workers, experts say.

Union members have received $250 per week from a strike fund beginning in the third week of the work stoppage. This compensation means a large pay cut for many employees.

“When strikes last longer than five or six weeks, the financial pressure really starts to hit the union base,” Robert Forrant, professor of American history and labor studies at the University of Massachusetts at Lowell, told ABC News.

Although union members are still widely opposed to the latest contract offer, it received more support than the first. That incremental progress could prompt Boeing to continue its strategy of raising workers’ wages while remaining steadfast in its refusal to reinstate a fixed pension, Ryan Stygar, a labor attorney at the San Francisco-based Diego, California-based Centurion Trial Attorneys, to ABC News.

Employees lost a traditional pension plan in a contract ratified by the union in 2014. The union’s demand to reinstate the pension may be more appealing to longtime workers who feel they have lost their retirement benefits than younger workers who have joined the company since the shift. into a 401(k), Stygar said.

“Boeing’s strategy will be to try to exploit that generational gap,” Stygar said, noting that higher wages and a larger ratification bonus could encourage younger workers to support a future proposal even if it doesn’t include a pension reinstatement.

“As the strike continues and Boeing’s losses pile up, I think we will see more aggressive negotiations,” Stygar added, saying the standoff could continue for another two to four weeks.

“But I don’t have a crystal ball,” Stygar said.

Jack Moore and Ayesha Ali of ABC News contributed to this report.