Striking Boeing employees vote on a new contract offer

Boeing factory workers voted Wednesday whether to accept a contract offer that includes big pay increases but no traditional pension plan, or whether to continue a strike that has crippled the company’s aircraft production for nearly six weeks.

Voting began just hours after Boeing reported losing $6.2 billion in the third quarter, largely due to massive writedowns in both its aircraft and defense businesses.

Members of the International Association of Machinists and Aerospace Workers voted at union halls in Washington state, Oregon and California on a Boeing offer that would increase wages by 35% over four years, pay a one-time ratification bonus of $7,000 per worker and annual productivity bonuses worth several thousand dollars each.

Before the doors opened in a hall near the Boeing factory in Renton, Washington, workers joined a snaking line outside, amid scattered calls to keep the strike going.

“It will be a split vote,” predicted Brian Hatcher, who has been with Boeing for 15 years and said he voted against the offer mainly because it would not bring back pensions that were frozen a decade ago.

Theresa Pound, a 16-year Boeing veteran, also voted against the deal. She said the health plan has gotten worse, with higher premiums and more out-of-pocket expenses, and her expected retirement benefits wouldn’t be enough, even when combined with a 401(k) retirement account.

“I’ve put more time into this place than was ever expected of me. I literally put blood, sweat and tears into working at this company,” the 37-year-old said. what is happening in the market.”

Frederic Scholter, a flight line inspector who worked at Boeing for 48 years and experienced six strikes, voted in favor.

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“I think if Boeing gives us good money to invest on our own, it’s up to you to plan your retirement that way,” he said. “It was not a good contract initially. I think this contract meets us halfway.”

The union said it expected to announce the results of the vote on Wednesday evening. Union leaders, who were outed last month when they backed an earlier offer that 94.6% of members voted against, did not support the latest proposal but said it was worth considering.

If the contract is approved, the 33,000 striking Boeing workers would return to work between Friday and October 31.

The strike, which began on September 13, served as an early test for Boeing CEO Kelly Ortberg, who became CEO in August.

In his first comments to investors on Wednesday, Ortberg said Boeing needs “a fundamental culture change” and laid out his plan to revive the aerospace giant after years of heavy losses and damage to its reputation.

Ortberg reiterated in a message to employees and on the earnings call that he wants to “reset” management’s relationship with labor “so that we don’t become so alienated in the future.” He said business leaders need to spend more time on the factory floor to know what’s going on and “prevent the festering problems and work better together to identify, resolve and understand the root cause.”

Ortberg, a Boeing outsider who previously led Rockwell Collins, a maker of avionics and flight controls for aviation and military aircraft, said Boeing is at a crossroads.

“Confidence in our company has been damaged. We have too much debt. We have experienced serious performance declines across the business, leaving many of our customers disappointed,” he said.

But Ortberg also highlighted the company’s strengths, including a backlog of aircraft orders worth half a trillion dollars.

“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can once again become an iconic company and leader in aerospace,” he said.

In recent weeks, Ortberg announced large-scale layoffs — about 17,000 people — and a plan to raise enough money to avoid a bankruptcy filing.

Boeing hasn’t had a profitable year since 2018, and Wednesday’s numbers represented the second-worst quarter in the manufacturer’s history. Boeing lost $6.17 billion in the period ended September 30, with an adjusted loss of $10.44 per share. Analysts polled by Zacks Investment Research expected a loss of $10.34 per share.

Sales totaled $17.84 billion, matching Wall Street estimates.

The company burned through nearly $2 billion in cash this quarter, weakening its balance sheet, which is loaded with $58 billion in debt. Chief Financial Officer Brian West said the company won’t generate positive cash flow until the second half of next year.

The shares of The Boeing Co. fell 2% in regular trading on Wednesday.

Boeing’s fortunes took a turn for the worse after two of its 737 Max planes crashed in October 2018 and March 2019, killing 346 people. Safety concerns were renewed in January when a panel blew off a Max during an Alaska Airlines flight.

Ortberg must convince federal regulators that Boeing is repairing its safety culture and is ready to ramp up production of the 737 Max — a crucial step to raising much-needed cash. However, that cannot happen until the striking workers return to work.

Boeing has steadfastly resisted a union demand to reinstate a traditional pension plan that was frozen in 2014. However, employees covered by that plan would receive a slight increase in their monthly retirement benefits under the latest offer.

“The pension should have been the top priority. We all said this was our top priority, along with wages,” Larry Best, a customer quality coordinator with 38 years of experience at Boeing, said Tuesday as he stood on a picket line outside a Boeing factory in Everett, Washington. “This is prime time’s best chance to get our pensions back, and we should all stay out and dig our heels in.”

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