Boeing workers to vote on ending strike in critical week for plane maker

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Members of Boeing’s largest labour union will vote on Wednesday whether to end a costly strike that has crippled production for more than a month, as part of what is shaping up to be a critical week for the stricken US plane maker. The International Association of Machinists and Aerospace Workers (IAM), which represents 33,000 Boeing staff, said on Saturday that it had received a “negotiated proposal” from the company that “is worthy of your consideration”. Members will vote on whether to end the strike by ratifying the contract on Wednesday, the same day that Boeing is due to report its results for the third quarter. Although Boeing has already warned it will book about $5bn in pre-tax charges for the period, it will be the first time that chief executive Kelly Ortberg addresses analysts and investors since taking the helm in August with a mandate to turn around the aerospace and defence giant. Alongside the warning, Ortberg said last week the company would cut 17,000 jobs and delay the first delivery of its 777X jet in an effort to stem losses. Ortberg has indicated that Boeing requires a major reboot, telling employees that “restoring our company requires tough decisions”.“We will have to make structural changes to ensure that we can stay competitive and deliver for our customers over the long term,” Ortberg wrote in a note to employees last week. He warned Boeing would have to focus its resources on “performing and innovating in the areas that are core to who we are, rather than spreading ourselves across too many efforts that can often result in underperformance and under-investment”. Analysts have said that Ortberg will review all of Boeing’s activities. Speculation has focused in particular on the future of parts of its space operations, which include launching satellites, as well as the Starliner space capsule and a joint venture launch business with Lockheed Martin.Resolving the strike this week would be a major boost for Ortberg. Bank of America analysts estimate that the stoppage is costing Boeing $50mn per day. The company last week announced plans to raise up to $25bn in new capital. Union members walked out of plants in Washington state nearly five weeks ago in a dispute over pay and benefits, halting production of Boeing’s bestselling 737 Max aircraft, as well as its 767 and 777 jets, compounding its financial troubles. US regulators had already forced the company to slow down production of the 737 in an effort to improve quality control after a door panel blew off one of its aircraft during an Alaska Airlines flight in January. Its supplier Spirit AeroSystems said on Friday that it would furlough 700 workers employed on the 767 and 777 programmes from the end of the month. The company said it had run out of storage after building up inventory.In July, Boeing pleaded guilty to misleading US regulators about a flight control system that caused two fatal crashes of the 737 Max in 2018 and 2019.The IAM’s negotiating committee said in a statement on Saturday that the new agreement included a 35 per cent wage increase spread over four years and had been brokered with the help of acting US labour secretary Julie Su. Workers will also receive a one-off $7,000 bonus and increased contributions to their retirement savings accounts. The revised offer is up from the 30 per cent Boeing offered last month but it does not reinstate Boeing’s defined benefit pension plan, seen as a sticking point by some union members who are resentful about past pay increases at times when executives were richly rewarded. The tentative deal does not guarantee workers will agree. No new vote on strike action is needed because members are already on strike. In a statement, IAM leaders Jon Holden and Brandon Bryant said the agreement was “a testament to the resolve and dedication of the frontline workers who’ve been on strike”. But, they added, “workers will ultimately decide if this specific proposal is sufficient in meeting their very legitimate needs and goal of achieving respect and fairness at Boeing”.