Boeing grounded due to $1bn per month strike

Disney on Ice will be coming to Everett this week. Mickey Mouse, Donald Duck and other Disney characters will perform at the Angel of the Winds arena in Everett. The cast at the stadium on Wednesday was a far cry from the one that appeared last week. Boeing machinists wore vests, shorts, red baseball caps with the slogan “Make America Great Again”, or their uniforms. They filed into the arena in the heart of Washington State.

The workers were voting to end a six-week walkout that costs Boeing $1 billion a month. Boeing is believed to lose tens or even hundreds of millions of dollars per day as a result of the walkout that began in September.

Levi Davidson, a 23-year-old man, said, “I’m striking and we’re fighting for a pension.” He was one of the scores of people holding a placard that read, “No Pension, No Planes.” “I have been working for the company less than a month, but I still want to support and raise my family throughout my lifetime.” A pension allows me to do that.

Boeing’s initial offer of a 35% pay increase over four years and a $7,000 bonus for ratification, as well as increased contributions to retirement savings, looked attractive. Boeing’s refusal of restoring a final-salary pension plan, which many of its 33,000 west coast employees believe was “stolen”, was decisive. About 64 percent voted against the deal, a vote that critics of the company will use as new evidence that Kelly Ortberg’s is out-of-touch with the rank-and-file employees.

“I think all workers deserve to have a defined-benefit pension. It was wrong to remove one of the hallmarks of retirement safety, and it is a just fight to get it back”, said Jon Holden. He’s the leader of the IAM union, which is on strike.

Larry Best, 58 and in his fourth decade of working at Boeing, said, “We need to wait another two weeks or maybe even a month.” “This isn’t just for me. It’s for him,” he said, pointing to 23-year old Davidson.

Boeing is expected to lose tens or even hundreds of millions in revenue every day as a result of the walkout that began on September 13. The rejection of the agreement, and the fact it will result in the production lines at Boeing’s massive factories remaining idle for longer is not only bad news for America’s largest industrial exporter.

As airlines wait to receive more efficient aircraft in order to meet a growing demand, the travelling public will be affected. Fewer seats are generally associated with higher prices in a world of airfares that is a function both of demand and supply. Boeing’s woes are bad news for bargain-hunters.

Boeing’s problems go beyond the recent spat it had with its staff. Many on the 15 picket lines outside Washington factories say that the breakdown of industrial relations is indicative of a larger malaise. The company hasn’t made a profit in 2018.

Boeing, fearing that Airbus was gaining ground, launched the fuel-efficient 737X, now known as 737 Max in an attempt to catch up. The critics claim that Boeing rushed to launch the 737 Max in order to please Wall Street investors. This has become a top priority for Boeing since the 1980s stock market boom. After Boeing’s merger with McDonnell Douglas in 2001, the corporate headquarters was moved from Seattle, to Chicago. This move was seen as a distancing of the company from their engineering prowess. Boeing moved to Virginia in 2022. They fired the engineers. Boeing has become a company of bean-counters,” Paul, 56, who is a door rigger for Boeing’s long haul 777 aircraft and has been with the company for over 27 years, said.

In May 2017, the Max, an aircraft that competes with Airbus’s A320 jet family for short- to medium-haul flights, was launched into the sky. Airlines couldn’t get enough of this new plane. Boeing received nearly 5,000 orders by September 2018. Boeing’s 737 MAX has been plagued by major problems since the Ethiopia Airlines crash of 2019.

The tragedy struck again the next month when Lion Air Flight 610 crashed into the Java Sea, off the coasts of Indonesia, minutes after taking off from Jakarta. The Max plane crashed, killing all 189 passengers and crew members. On March 10, 2019, less than six months after the crash, Ethiopian Airlines Flight 302, another Max plane, crashed shortly after takeoff from Addis Ababa in Ethiopia. 157 passengers, crew and other passengers were killed.

After initially seeming to point the finger at the pilots in the wake of the first crash under then boss Dennis Muilenburg, Boeing later admitted that faulty automatic-stabilising equipment was to blame. The software was made by Collins Aerospace – a company that Ortberg previously headed – and it was designed to compensate for the large engines under the wings of the planes. The software forced the planes to nosedive. Boeing was also thrown into a spin.

Dave Calhoun was Boeing’s CEO and he faced a Senate Hearing on the two disasters

Regulators grounded the Max for two years, a plane that was essentially the future of its manufacturer. The aviation industry was also hit by multi-billion dollar lawsuits, multiple fraud allegations and multi-billion dollar suits. Airlines stopped ordering aircraft after all but a few flights were grounded. Production at Boeing’s factories slowed down to a crawl. Dave Calhoun – Muilenburg’s successor – declared that Boeing must “restore confidence” with its customers and regulator.

Boeing’s fortunes were a little uncertain at the beginning of this year, despite ongoing supply-chain issues. But with air travel rebounding strongly in 2022-2023, there was some hope that Boeing might be on the right track.

A 737 Max door panel came off mid-flight, and it was discovered that critical bolts were missing.

On January 5, a panel of a 737 Max operated Alaska Airlines blew off mid-flight over Portland, Oregon. The plane landed safely, and all passengers and crew were able to escape. However, they quickly went into the media and described the horrific experience of having their phones, socks, and shoes ripped off by the uncontrolled decompression.

Four bolts, which were supposed to secure the “door plug”, were found missing after an investigation.

The blowout was seized upon by critics and whistleblowers as the latest instance of a culture that is still rotten at Boeing. Aviation investigators forced Boeing to slow down production in all of its factories so that planes leaving the factories are safe.

Next came the unrest in the workplace that led to the ballot last week. Ortberg believed that the IAM had averted strikes in early September, when they agreed to give a 25% pay increase over four years. The union leaders called the contract “the best we have ever negotiated” and urged members to vote for it. When it came to the vote, 95% of voters rejected it.

The latest Boeing contract offer is voted on by volunteers. It was rejected

Ortberg responded by cutting 17,000 jobs.

The agreement voted last week came much closer to the 40% pay increase IAM originally demanded. It was not enough.

Paul, on the picket lines, referred to the management’s decision to close the final salary scheme for staff during the last major negotiation: “They stole out pensions ten year ago.” If they give me a $7,000 bonuses, I will lose that amount in taxes. I want my pension and other long-term benefits back. “They’re more important to me than the pension.”

Holden, IAM’s Holden, echoed this sentiment in a press release after revealing the results of the ballot on Wednesday: “The loss is the pension remains at the core of this.”

Bartley Stokes Sr., who has been working for Boeing for 46 year, encourages employees to reject this deal

The mayor of Renton in Renton, a town south of Seattle, where Boeing’s 737 Max factories employ more than 12,000 workers, says that bringing the pension back is not only unpalatable to Ortberg, but also unaffordable. “Financially it does not work.” He said that it would bankrupt the company.

Boeing is not flush at all. Its debts could be downgraded to a “junk” rating and Brian West, the finance chief last week, warned that Boeing will “burn” cash in 2025.

Picket lines are located outside Boeing plants in 15 different locations across the state

However, there is some hope. Holden was receptive when asked if the union would accept “hybrid pension schemes” that combine elements of final salaries and defined contribution retirement benefits.

He said, “There are many hybrid plans out there. We’ve looked at them and are looking into them. I wouldn’t turn down anything that offers a benefit for our members.”

Nevertheless. The duopoly in aircraft manufacture is a major reason for the impasse between the two parties.

Boeing and Airbus are responsible for 90% of the market in commercial aircraft. If one or both of them were to disappear, the plane supply would quickly dry up. Fewer new aircraft mean that airlines will be unable to meet the demand for seats, even in developed regions like Europe. Eurocontrol, the air traffic control body, predicts that flight numbers will increase from 10.1 millions last year to up to 13.3 million in 2030.

A shortage of aircraft could lead to a reduction in the number of seats as carriers struggle to replace older aircraft.

Michael O’Leary said that dealing with Boeing was not enjoyable at the moment.

Ryanair is Boeing’s biggest customer on this side. Only if Boeing delivers 737 Max planes on time to Europe’s largest airline, will it be able meet demand.

Boeing was struggling to meet the schedule before the workers’ walkout, and Ryanair could be forced to cut back on its summer 2025 schedule in the event that the American company is unable to keep up with the schedule. “It’s not fun dealing Boeing at the present,” Ryanair CEO Michael O’Leary said to this newspaper in a recent interview.

B-17 Flying Fortress Heavy Bombers in 1943 – Boeing Plant 2 built 6,981 B-17 Flying Fortress aircraft during World War II.

Boeing’s massive factory, located on the outskirts Everett, was once the largest building free-standing in the world. Brian, a panel worker aged 66, who was on the picket outside in the shadow a 777X aircraft, an aircraft whose manufacture is linked to the demise of the Boeing pension, summarizes the sentiments: “It’s about respect.” It’s what we want.

Crowds at Paine Field Airport, Washington, for the first public showing of a Boeing 747 on September 30, 1968

Last week, Ortberg pledged to “fundamentally transform the culture” of Boeing. It remains to be determined if this will mean giving workers the respect that they deserve. The travelling public may be forced to pay the price for a long time in the form of high fares if this is not done.