Boeing workers overwhelmingly reject contract proposal amid recovery

In the United States, a potential strike was announced by the 3,200 members of the International Association of Machinists (IAM) at Boeing's Defense Systems unit in Saint Louis. The IAM District 837 rejected the contract proposal that included a 20% wage increase over four years, a ratification bonus of $5,000, and improved leave policies. This rejection took place after a similar strike occurred in Boeing’s Commercial Aircraft unit in October 2024, where a proposed agreement was also rejected by the rank and file, raising questions about the disconnect between union management and its members. Boeing has seen a recovery since Kelly Ortberg assumed the CEO position a year ago, with notable successes in various aircraft programs such as the 787 and 777 in the Middle East and Indonesia. However, the announcement of this potential strike was seen as unwelcome amid the company's recent gains, particularly since production for the 737MAX remains capped by the FAA at 38 planes per month. Despite the positive trajectory, the IAM members’ response indicates underlying dissatisfaction with the offered contract terms amidst an uncertain economic environment influenced by impending tariffs and inflation pressures. The rank and file's rejection of the contract proposal reveals a significant disconnect between what union leadership views as an acceptable deal and what workers feel they deserve, especially in light of recent settlements at competitor companies, including General Electric and Raytheon, which have seen comparable wage increases. It's noteworthy that average wages for machinists were estimated to rise to around $100,000 annually, reinforcing the belief that members were driven to push for higher gains due to recent developments in the labor market. As the IAM District 837 represents only about 2% of Boeing’s overall workforce, the anticipated strike is expected to be resolved quickly, likely aligning with the agreements reached in other divisions and companies. Both sides will enter a one-week cooling-off period aimed at facilitating negotiations, but the situation raises critical questions regarding the touchpoint between union management and workforce sentiment, ultimately posing a challenge to maintaining factory harmony as the defense program ramps up with the expected introduction of the F-47 fighter program.