(The Center Square) – Boeing machinists on Wednesday rejected a contract offer that would given them a nearly 40% raise over four years, a $7,000 signing bonus, higher company contributions to the Boeing 401K and a one-time $5,000 contribution to employees 401K’s.
The tentative agreement rejected by 64% of union members, would have ended the 41-day strike for 33,000 IAM District 751 members.
The contract rejection came on the same day Boeing reported losses for the third quarter of the year totaling more than $6 billion.
“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” said Kelly Ortberg, Boeing President and Chief Executive Officer in a company news release.
The third quarter report translated into a nearly $10 loss per share for Boeing stockholders.
“Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing,” said Ortberg.
The six-week strike has stopped production at Boeing plants in the Puget Sound, delaying orders for airlines of the 737 Max, as well as delaying space and defense orders.
According to an analysis of Cirium data by Bloomberg Intelligence as reported in Travel Weekly, Alaska Airlines had expected 14 Max deliveries between September and December, more than any other airline. American was supposed to take delivery of 10 Max planes through the end of the year and United was slated to get nine new 737 Max planes.
Boeing recently announced plans to lay off 10% of its workforce, including management positions, but not to include striking machinists.
The company’s third quarter report indicated the commercial airplanes division booked 49 net orders and delivered 116 airplanes, with a backlog of over 5,400 airplanes valued at $428 billion.
One sticking point that remains in negotiation is the union’s demand to reinstate a pension plan.
As previously reported by The Center Square, Boeing eliminated the pension program in 2014 and replaced it with a 401K employee/employer contribution program.
Pension plans are a retirement benefit set up by the employer, which commits to putting in a certain amount during the employee’s years of service, which is then used for retirement income.
According to the Bureau of Labor Statistics, only 15% of private industry workers had access to a pension fund in 2022.
According to the Institute for Financial Wellness, employers made the switch from traditional pensions to 401K plans in order to transfer responsibility for retirement savings onto their employees and decrease long-term financial obligations, ultimately leading to increased overall profits.
Though nearly two-thirds of machinists voted against the latest contract offer, it received far more support than the initial offer for a 25% raise which was rejected by 95% of members.
Boeing declined comment for this article.
