96% of Boeing's US West Coast factory workers voted in favor of a strike on Thursday.
Credit: Reuters Photo
Seattle: Boeing's US West Coast factory workers will walk off the job after 96 per cent voted on Thursday in favor of a strike, halting production of the planemaker's strongest-selling jet as it wrestles with chronic output delays and mounting debt.
The workers' first strike since 2008 will start at midnight Pacific time (0700 GMT) as Friday begins, just weeks after new CEO Kelly Ortberg was brought on in August to restore faith in the planemaker after a door panel blew off a near-new 737 MAX jet in mid-air in January.
Roughly 30,000 workers who produce Boeing's 737 MAX and other jets in the Seattle and Portland areas voted on their first full contract in 16 years.
International Association of Machinists and Aerospace Workers (IAM) members voted 96 per cent in favor of striking and 94.6 per cent to reject the agreement.
"This is about respect, this is about addressing the past, and this is about fighting for our future," said Jon Holden, who headed the negotiations for IAM, Boeing's largest union, before announcing the vote result.
"We strike at midnight," he said, as members in the union hall cheered and chanted: "Strike! Strike! Strike!"
Boeing did not respond immediately to a request for comment.
The deal included a general wage increase of 25 per cent, a $3,000 signing bonus and a pledge to build Boeing's next commercial jet in the Seattle area, provided the program was launched within the four years of the contract.
Although IAM leadership recommended last Sunday that its members accept the contract, many workers had responded angrily, arguing for the originally demanded 40 per cent pay rise and lamenting the loss of an annual bonus.
"We're going to get back to the table as quickly as we can," Holden told reporters, without saying how long he thought the strike would last or when talks would resume. "This is something that we take one day at a time, one week at a time.”
Workers have been protesting all week in Boeing factories in the Seattle area that assemble Boeing's MAX, 777 and 767 jets.
Boeing shares closed up 0.9 per cent on Thursday before the vote results were announced but are down 36 per cent this year on concerns over safety, production and a $60 billion debt burden.
The duration of the walkout is not clear. A long strike would weigh not only on Boeing's financials, but on airlines that depend on the planemaker’s jets and suppliers who manufacture parts and components for its aircraft.
According to a pre-vote note from TD Cowen, a 50-day strike could cost Boeing an estimated $3 billion to $3.5 billion of cash flow.
The Boeing workers' last strike in 2008 shuttered plants for 52 days and hit revenue by an estimated $100 million per day.
S&P Global Ratings said that an extended strike could delay the planemaker's recovery and hurt its overall rating. Both S&P and Moody's rate Boeing one notch above junk status.
The White House did not immediately respond to a request for comment.