33,000 Boeing Union Workers Go On Strike, First Major Walkout Since 2008

Members of the International Association of Machinists And Aerospace Workers, which represents 33,000 Boeing employees at factories near Seattle and elsewhere, overwhelmingly rejected a 'historic contract offer' with the troubled planemaker and voted to go on strike. 

IAM said 94.6% of union members rejected the contract offer from Boeing, which called the offer "historic" and highlighted the 25% wage increase over four years as "the largest-ever general wage increase." About 96% of union members approved the strike, now unfolding at the planemaker's Seattle factories that make the 737 Max. 

The union released this statement:

"We are incredibly proud of the hard work and dedication shown by the negotiating teams from District 751 and W24 and the unwavering solidarity of our membership. Their tireless efforts have been on display throughout this entire process. Now, they will regroup and begin planning the next steps on securing an agreement that our membership can approve.

"We will make every resource available for our District 751 and W24 members during this challenging time. IAM members from across North America stand in solidarity with our members in the Pacific Northwest and California. Our goal is to get a strong contract that meets the needs of our members."

Jon Holden, president of IAM District 751, said this labor action "has been a long time coming, our members spoke loud and clear tonight," adding, "Clearly there were aspects of this agreement that weren't good enough." 

The last time Boeing machinists went on strike was September 7, 2008. At the time, the strike was over job security, outsourcing, pay, and benefits.

Now, as explained by Holden, union workers at Boeing have been plagued with 16 years of stagnated wages. This comes as Bidenomics backfires on the economy, with elevated inflation and high interest rates financially crushing the working poor.

He said, "There's a lot at stake here for our members, so I am proud of them. And we're going to get back to the table as quickly as we can." 

Boeing told Bloomberg it remains "committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement."

In premarket trading in New York, Boeing shares are down around 4%. As of Thursday's close, shares were down nearly 38% on the year. 

"Boeing has been in a financially difficult situation since the January 5 accident exposed deficiencies at its factories and forced the planemaker to reduce production. The company has been bleeding cash as a result, and its credit rating is hovering one step above speculative grade as it contends with a heavy debt load of $45 billion," Bloomberg noted. 

Here's what Wall Street analysts are saying about the labor action:

Jefferies analyst Sheila Kahyaoglu (buy, PT $270)

• “The magnitude of the strike’s impact will be dependent on its duration”
• The company was hit by a 58-day strike in 2008 — delaying >100 aircraft deliveries
• “Boeing stated that it was ready to get back to the table and reach a new agreement,” Kahyaoglu writes

Bloomberg Intelligence analyst Tim Bacchus

• Boeing’s latest strike, even an extended one, “might have relatively little impact on Asian and Mideast airlines”
• “In Europe, Ryanair is most exposed as it expects eleven 737 MAX 8 deliveries, nine which are unfinished”

Since Boeing is the single largest US exporter, an extended work stoppage at commercial jet factories would result in fewer exports, contributing to lower GDP growth. 

Furthermore, depending on the length of the labor action, it could spark serious issues for nearly 10,000 Boeing suppliers that can be found across the US.