Boeing (BA) has just hit a major snag in negotiating with the roughly 33,000 workers who went on strike earlier this month for higher pay, decreased out-of-pocket health care costs, retirement security, etc.
As Boeing loses an estimated $100 million in daily revenue from the strike, according to analysts from Northcoast Research, the company sought to put an end to its suffering with the “best and final offer” it made to employees on Sept. 23, after its previous one was rejected.
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"After an unsuccessful federal mediation last week, we presented a best and final offer that made significant improvements and addresses feedback from the union and our employees," said Boeing in a statement to TheStreet.
The final offer includes a 30% pay increase over four years (an increase from the 25% Boeing previously offered), a ratification bonus that was doubled to $6,000, annual bonuses, and an increased company contribution to employee retirement plans.
Boeing gave workers until Sept. 27 to vote on the new contract, but the International Association of Machinists, the union that represents the workers, is criticizing the offer for being a “show of disrespect” and an attempt to “drive a wedge” between members.
“Boeing took it upon itself to disrespect our entire Union by sending this offer directly to all members and the media without any prior communication from your Union,” said the IAM in a statement to its union members on X. “This offer was not negotiated with your Union; it was thrown at us without any discussion.”
The union also claimed that the company refused to make an offer that addressed its concerns and priorities and that Boeing “missed the mark” with its latest proposal. The IAM also stated that it does not have enough time to organize a vote on the offer by Sept. 27, and after Boeing allegedly refused to meet with the union to further discuss the matter, it has opted not to conduct a vote.
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“This tactic is a blatant show of disrespect to you - our members - and the bargaining process. Boeing does not get to decide when or if you vote,” said the IAM. “Boeing has misled the media by wrongfully stating the Union membership is required to vote on their latest offer. As you see in Boeing's offer, they made it contingent on ratification by 11:59 PM PT on Friday, September 27, 2024. This does not give us enough time to present details to the membership or even secure all voting locations.”
Boeing warns employees of negative impact of a strike
Boeing’s latest offer to the union comes after it sent a memo to its employees last week revealing that the strike will have a negative impact on the company financially, and as a result, it will have to make a series of cutbacks which include temporary layoffs, hiring freezes, a pause on charitable expenditures, etc.
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“Our business is in a difficult period,” said Boeing Chief Financial Officer Brian West in the memo. “This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future.”
This is the first strike Boeing has faced in 16 years, and it comes during a time when the company is already losing a significant amount of money due to rising concerns over the safety and quality of its 737 Max aircraft after several scary incidents. As these concerns are being investigated by the Federal Aviation Administration, Boeing’s production of the 737 Max has come to a screeching halt, causing airlines that ordered new 737 Max planes to face delivery delays.
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