Since the end of September 2024, Boeing has been experiencing one of the largest labor disputes in recent years. The International Association of Machinists and Aerospace Workers (IAM), which represents over 25.000 employees in the Boeing Group, has called a strike since September 23, which has hit the company hard.
However, after another failed attempt at negotiations at the end of September, there is still no prospect of an agreement. The negotiations between the union and Boeing were "broken off" without new dates being set. This has far-reaching consequences for Boeing, the aviation industry and employees, as the production of aircraft and important components continues to be significantly disrupted.
Looking back: How the strike came about
The demands of the IAM machinists go far beyond the usual wage increase discussed in regular collective bargaining in the aerospace industry. The core issues of the dispute are a 40 percent wage increase and the reinstatement of the defined benefit pension plan that Boeing eliminated about ten years ago. That plan guaranteed retirees a fixed pension amount, while the company has since switched to a defined contribution plan that calculates pensions based on individual savings and market values.
This pension plan, which was in place until 2014, had long ensured the loyalty and satisfaction of many Boeing employees. Its abolition is therefore seen as a profound breach of trust. Many machinists see the return to this model as a matter of respect and recognition for long-serving employees who have often worked for the company for decades.
The course of the negotiations
On September 27, 2024, representatives of the IAM and Boeing met for further mediation talks. With the mediation of the Federal Mediation and Conciliation Services (FMCS), it was hoped that the labor dispute could be settled. The talks focused on the union's core demands, but no agreement was reached. The IAM union made it clear that Boeing continued to stand by its position of not reinstating the defined benefit pension plan. In addition, the company had not made any significant concessions on the union's other demands, such as faster wage increases and expanded paid vacation (PTO).
According to union representatives, the demand for higher wages is also essential, as employees see their purchasing power greatly reduced after years of stagnant salaries and increasing pressure from inflation. In the negotiations, Boeing had offered a 30 percent wage increase over the next four years as well as additional bonuses - an offer that was rejected by employees as inadequate.
Boeing: "Best and final offer"
On September 23, Boeing presented its "best and final contract offer" to the engineers, but it was promptly rejected. This offer included a 30 percent pay increase over four years, additional lump sums and bonuses. But the rejection clearly shows that the differences between the parties go deeper than just financial details.
The union emphasizes that for many workers, the pension plan is one of the most important achievements of their careers. Boeing, on the other hand, argues that the defined contribution pension plan model is now standard in the industry and must keep the company competitive. In addition, Boeing continues to struggle with structural and financial challenges following the economic strains caused by the COVID-19 pandemic and supply chain crises.
Impact of the strike
The strike at Boeing has far-reaching effects on the production of both civil and military aircraft. Boeing is one of the largest employers in the aerospace industry and supplies aircraft to airlines and military equipment to governments around the world. Delays in the delivery of new aircraft are already to be expected, which is particularly serious for airlines in a phase of recovery after the pandemic. Many airlines urgently need new aircraft to meet the increased demand.
The strike also means enormous losses for Boeing itself. In previous industrial disputes of this magnitude, the company's production and profitability were severely affected. The longest strike to date, which took place in 2008 and lasted around two months, is estimated to have cost Boeing more than 2 billion US dollars. Similar effects can be expected for the current industrial dispute if it drags on for longer.
What are the next steps?
The IAM union says it remains willing to negotiate with Boeing, both directly and through mediation. However, until new dates for talks are set, the industrial action will remain in place. The machinists remain determined to win their demands and the strike will likely continue until a solution is in sight.
For Boeing, this is about more than just the financial demands of the employees. The industrial action poses fundamental questions for the company regarding its long-term strategy in personnel policy, especially in view of the growing shortage of skilled workers in the industry. If Boeing does not soon find a solution that is acceptable to both sides, the ongoing production outages could not only have a lasting impact on delivery plans, but also on customers' confidence in the stability of the company.
The strike by IAM machinists at Boeing shows how deep the tensions are between the workforce and the company. The demands for a 40 percent pay increase and the reinstatement of the defined benefit pension plan are essential for employees to restore a sense of security and appreciation. Boeing, on the other hand, is under pressure to remain competitive and manage financial burdens in a difficult economic environment. The outcome of this strike will affect not only the future of the affected employees, but also the direction of the entire aviation industry.
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