‘Where is the justice for us?’

By Geoff Mirelowitz

In an October 23 vote, striking members of District 751 of the International Association of Machinists (IAM) rejected the aerospace giant’s latest contract offer by 64%. The union did not release figures on how many of its 33,000 members cast a ballot. The New York Times headline on the vote referred to the rejection as “resounding.”

The walkout began September 13 after 95% of the Machinists membership rejected an earlier proposed contract recommended by IAM officials and 96% authorized a strike. After the strike began Boeing made a second offer via the news media, rather than bringing it to union negotiators. This angered many workers. Union officials declined to bring that offer to a membership vote.

Boeing’s third offer provided improved terms. According to the Seattle Times: “The latest proposal included a 35% general wage increase over the span of the four-year contract, an increase from Boeing’s previous offers but still shy of the raise some Machinists wanted to see. It also increased the company’s contribution to a 401(k) retirement plan, guaranteed a 4% annual bonus and tacked on a one-time $7,000 bonus if ratified.”

IAM officials brought the proposal to the membership as one “worthy of your consideration,” but declined to make a recommendation to vote for or against it. Striking workers clearly found the proposal inadequate and are determined to get a better contract.

Two issues have emerged as central in the strike. One is that the wage gains offered by Boeing, while seemingly substantial, do not make up for the erosion of workers’ wages in the 10 years since Boeing imposed a concession contract in 2014. “Consumer prices in the Seattle area have risen more than 40 percent over the past decade, according to federal data,” the New York Times reported.

Striker Vaughn Johnson voted “No,” although he told the Wall Street Journal, Boeing’s offer was an improvement. “It’s the first real offer from the company,” he told the Journal. Johnson, who is married and has a 2-year-old, said the contract would have brought worker pay even with inflation since the last contract in 2014, but didn’t feel like a substantial raise beyond that. “It sounds good but if you factor in buying power, it still seems like we haven’t gotten a real raise.”

“The offer wasn’t good enough for the people who have to support a family here,” Melanie Marciniak, told the Seattle Times. Marciniak is 19 and has worked at Boeing just over a year. She works on the 737 wings at the Renton factory and lives with her parents.

Alan Lewis, 49, a Machinist at the spare parts distribution center in SeaTac for 11 years, told the Seattle paper he “couldn’t be happier” at the outcome of the vote. “I think they can do better.”

A number of workers who voted to approve the latest contract offer cited concerns over Boeing’s financial future and expressed worries there may not be jobs to return to.

Diana Truong, a 25-year Boeing veteran, cited such reasons for her decision to vote yes. “Look at the economy,” she told the Seattle Times at the Renton union hall on October 24. “It’s really bad right now. You’re lucky you have a job.”

Anger over loss of the pension plan

The second issue that prompted a majority of Machinists to vote no is the deep-going anger over the loss of the defined benefit pension plan that Boeing eliminated in the 2014 contract. Workers have not forgotten Boeing’s strong-arm tactics at the time, when it threatened to move future airplane production out of the Seattle area if the IAM did not accept that demand.

The restoration of a pension plan is “right at the heart of this for many,” District 751 President Jon Holden said after the vote.

“Boeing has said that is a nonstarter,” reported the Seattle Times.

As World-Outlook has previously reported, “Boeing ended the long-standing fixed-payment pension plan for new hires and capped the years of eligibility and payments for those who retained pension rights. The new replacement plan consisted of modest company payments into an Individual Retirement Account (IRA) for each employee.

“That proposal was first rejected and barely survived a second membership vote with a 51% majority. Local union officials opposed the deal on the second vote. That vote was imposed on District 751 by top officials of the IAM international union.”

An October 24 New York Times article underlined this. “Many workers have been furious over that loss for years,” it noted, “and some have said that they felt Boeing had bullied them into agreeing to the freezing of the pension. Workers have also been angry with the leadership of the union’s parent organization, which they say scheduled the vote in a way that supported approval of the offer.”

In recommending Boeing’s initial contract offer this year, IAM District 751 officials misread this mood in the ranks just as Boeing did. Speaking to reporters after the most recent contract rejection, Holden acknowledged, “There’s some deep wounds.” He said the union may explore what he called hybrid defined-benefit programs in negotiations.

Speaking to members at the IAM union hall, Holden said, “There’s much more work to do. We will push to get back to the table, we will push for the members’ demands as quickly as we can.”

The strikers assembled there chanted, “Fight, fight!”

Boeing crisis gives workers leverage

“Without a deal, factories that build the 737, 767 and 777 jets remain idled, further sapping the company’s revenue and risking more disruption in its supply chain,” said the October 24 Wall Street Journal.

Striking workers seem to understand this point well and many feel it gives them leverage to push Boeing to meet more of their demands.

The Journal reported the six-week strike “has plunged the jet maker into increasing financial peril.”

Boeing faces “myriad legal, manufacturing and financial crises, stemming in part from fatal crashes of two of its 737 Max jets — one in 2018 in Indonesia and one in 2019 in Ethiopia — that killed 346 people,” reported the October 24 Washington Post.

“An end to the walkout that began Sept. 13,” the Post added, “would have been a step forward for Boeing, which is struggling to restore confidence in its brand after a series of missteps, including the midair blowout of a door panel from one of its 737 Max jets in January. A ‘no’ vote, however, now threatens to stall Boeing’s recovery effort and deepen its financial woes.”

Boeing’s losses have been staggering. It recently reported a loss of $6.2 billion in the third quarter of this year.

“Including this quarter,” the Washington Post reported, “it has reported losses of more than than $30 billion since 2019.” It added, “Analysts estimate the walkout, which has shut down production of some of the company’s best-selling jets… is costing Boeing $1 billion a month.”

Even before Machinists rejected Boeing’s latest contract offer, the big-business media was sounding the alarm about the crisis at Boeing and other top U.S. manufacturers as a sign of a weakening of the U.S. economy in the world.

Crises at Boeing and Intel Are a National Emergency, read a headline in the October 21 Wall Street Journal. “The two companies once set the standard for world class engineering and manufacturing. Their troubles weaken America,” the article’s subhead pointed out.

“A generation ago, any list of America’s most admired manufacturers would have had Intel and Boeing near the top,” the Journal noted.

“Today, both are on the ropes.­ Intel has suspended its dividend, slashed jobs and capital spending, and is a takeover target. Boeing has been hobbled by investigations into crashes and a midair mishap, production delays and a strike. A breakup or bankruptcy are no longer unthinkable.”

Recently appointed Boeing CEO Kelly Ortberg has attempted to respond to these concerns. Earlier this month he announced a plan to cut the overall workforce by 10%, or about 17,000 employees. Boeing layoff plan suggests deep white-collar job cuts, read an October 14 Seattle Times headline. “Though Machinist layoffs could come later,” the paper reported, “initial cuts will be among white-collar staff, including engineers, and nonunion salaried employees at all levels up to vice presidents.”

Ortberg has also announced plans to try to raise as much as $25 billion in new capital investment for Boeing. “The company,” reported the October 15 Seattle Times, “filed with regulators on Tuesday to sell any combination of bonds and shares, known as a shelf registration. Boeing is looking to shore up its balance sheet and boost access to cash, as it tries to avoid getting cut to junk status by bond graders and facing much higher borrowing costs.”

The company has also arranged “a separate new credit agreement…for $10 billion, giving it ‘additional short-term access to liquidity as we navigate through a challenging environment,’” wrote the Seattle Times.

Only solution is a contract the union ranks approve

None of these steps can solve Boeing’s crises unless the strike ends and workers begin to manufacture planes again. That is the only way the company can get significant new income flowing and hope to begin to restore investor confidence.

Ortberg seems to be aware of the dilemma. “Ortberg said he was committed to resetting the company’s relationship with the unionized workforce responsible for putting the planes together,” reported the Seattle Times.

Whether such a “reset” will occur remains to be seen. But it is idle talk until Boeing puts forward a contract offer that is acceptable to the union ranks, who registered their determination clearly in both votes rejecting Boeing’s proposals.

The attitude of many workers was captured in the comments of Kelly Day, a worker who has assembled planes at Boeing since 1996. “Day brought up previous Boeing leaders and their earnings,” wrote the Seattle Times, “like former CEO Dave Calhoun, who stepped down earlier this year and in 2023 received compensation worth $23.6 million.”

“Where is the justice for us?” she asked.

The most recent contract proposal was arrived at “after Boeing and the union leadership met separately with acting Labor Secretary Julie Su for several days in Seattle,” wrote the Seattle Times. District 751 President Holden, it added, “said Wednesday evening after the strike vote that he would again reach out to the White House for help negotiating a deal. It’s not clear when both parties would return to bargaining.”

A new appeal to the Biden administration is not a strategy to mobilize the union’s ranks to exert the maximum possible pressure on Boeing. The outcome of such an appeal is uncertain.

An appeal that is certainly necessary is one directed to the rest of the labor movement and the entire working-class public, asking for active solidarity and support for the strike.

What is completely clear is that the strike will continue until the union membership is satisfied it has achieved all of the gains it is strong enough to win today.

Geoff Mirelowitz was an active trade unionist for more than 30 years, including 17 years as a member of SMART Local 845 in Seattle while working on the Burlington Northern Santa Fe railroad.

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