How will IAM 751 union members vote on Wednesday for the latest wage proposal for Boeing? Much of the industry is looking on anxiously.
In June last year, Spirit AeroSystems had to stop operating for about a week because of a strike. This came during contract negotiations with the local chapter of the company’s IAM machinists’ union. The strike ended when Spirit accepted a wage increase of 23.5% over four years – among other improvements.
The industry breathed a sigh of relief after that strike ended. But almost immediately, many analysts and Boeing investors started asking some questions: was this strike a prelude for things to come? What did it say about the rise in touch labour costs? What were its implications on the negotiation between Boeing and IAM 751, which was due a bit over a year after that strike?
Boeing and the IAM 751 Vote
That was in the summer of 2023. We now know the answer. Wednesday’s vote will mark six weeks since IAM 751 union members walked out from multiple Boeing facilities, halting production of the 737, 767 and 777 airliners. And there is every chance that the vote won’t end the strike.
Boeing is now offering IAM 751 union members a 35% increase in pay. There is also a $7,000 ratification bonus, a reinstated incentive plan plus enhanced contributions to each worker’s 401(k) retirement plans, along with a one-off $5,000 contribution, plus up to 12% in employer contributions.
The IAM 751 leadership didn’t express its support for this Boeing offer, unlike what they did for the company’s initial offer in September. For weeks, the two sides have been reluctant to address each other, communicating instead through Acting U.S. Secretary of Labor Julie Su.
The riddle that everyone is trying to solve now is how the IAM 751 membership will vote on this Boeing offer. A lot of analysts have good words to say about the fact that the negotiations are at least moving past the stalemate of the past couple of weeks.
Options?
But that doesn’t mean that the strike could be about to end. Boeing is still not offering everything IAM 751 has asked for. The union wanted a 40% wage hike, plus the return of their fixed pensions, that they lost in 2014.
Leeham News has analyzed in detail how the demographics of the IAM 751 membership will likely impact their attitude toward Boeing – and, therefore, their vote. Other observers are similarly reserved after reviewing online comments attributed to IAM 751 members.
Boeing has explored a variety of ways of securing funding over the past week. This limits the prospect of Chapter 11 bankruptcy for the manufacturer, as we have seen. On the other hand, IAM 751 members have reportedly saved up for a three-month strike. That puts us around halfway there.
It isn’t clear if the manufacturer could handle that. A lot of Boeing customers, suppliers, politicians and other stakeholders are pressuring the two sides to arrive at a compromise. But the questions remain: did Boeing’s redundancies announcement shake the workers? And what are Boeing’s options if its offer is rejected?
Sources: Reuters, Leeham News
