It has been over a month since one of Boeing's 737 Max 9 aircraft, operated by Alaska Airlines, suffered a structural blowout mid-flight. Between aircraft groundings, inspections and increased FAA scrutiny, Boeing is still trying to recover from the incident.
Now, the aircraft manufacturer is facing another challenge from the International Association of Machinists and Aerospace Workers (IAM), the company's largest union, which is still irked over a deal that barely received approval in 2014.
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Boeing and IAM still have time to work out a new contract as the current one expires in September. However, Bloomberg reports that a strike would shut down Boeing facilities in Oregon and Washington State and assembly lines for 737s.
With contract negotiations scheduled to begin in about a month, Boeing issued a statement that said the company believes a path exists to a new contract that addresses its employees' needs and concerns while remaining competitive in the global market.
The 2014 deal received 51% approval and extended the contract by eight years. Prior to the vote, Boeing had threatened to relocate assembly of its then-new 777X airplane away from the Seattle area. Approving the deal saved jobs but froze worker pensions. It also approved a 4% general wage increase throughout the contract, cost of living and a $10,000 signing bonus.
Bloomberg reported that the union is demanding a 40% pay raise over three to four years. Other demands include reinstating quality inspections that had been suspended, a return of defined-benefit pensions, a decrease in out-of-pocket health costs and a more flexible overtime system.
On Boeing's side, Bloomberg cited Sheila Kahyaoglu, a Jefferies analyst who estimated that every 10% increase in machinist wages would weigh down 2026 free cash flow by $260 million before productivity and price offsets.
Jon Holden, the IAM District 751 president, said the union will not take the possibility of a strike lightly but added, "We're willing to do it."