Portugal Colonial - Boeing workers strike after rejecting contract

Union leaders called for the strike to start just after midnight on Friday (0700 GMT), hours after hourly workers in the Seattle region in the Pacific Northwest spurned the tentative contract with a vote of 94.6 percent and to strike with 96 percent.

A strike will shutter two major plane assembly plants for the 737 MAX and 777 in the Puget Sound region and sidelines some 33,000 workers, further delaying the financially stressed company's turnaround efforts.

"Our members spoke loud and clear tonight," said Jon Holden, president of the International Association of Machinists and Aerospace Workers District 751, after the vote.

"We strike at midnight."

Picketers were out in front of the Renton plant -- where Boeing's flagship 737 Max aircraft is produced -- in the early hours of Friday, holding signs reading "On strike against Boeing", according to Bloomberg.

Thursday's vote was a decisive rejection of a deal that line workers said was far less generous than depicted by Boeing executives, marking the latest show of defiance by unions following earlier strikes in the auto, entertainment and other industries.

Boeing said it was "ready to get back to the table to reach a new agreement."

Led by new CEO Kelly Ortberg, Boeing had hoped a 25 percent wage hike over four years and a commitment to invest in the Puget Sound region would be enough.

Ortberg argued in a message to staff that the general wage hike marked the largest in history, and that a strike "would put our shared recovery in jeopardy".

But rank-and-file workers reacted with fury to the agreement, which was initially backed by IAM leadership.

- 'Hollow' commitments -

Workers had sought a 40 percent wage hike and critics have said the 25 percent figure is inflated because the new deal also eliminates an annual company bonus.

Other points of contention include the deal's failure to restore a pension, as well as Boeing's pledge to build its next plane in the Seattle region, which critics said offers no promises beyond the four-year contract.

"They're talking about a 25 percent increase and it's not," said Paul Janousek, an electrician in Everett who voted to strike.

Janousek, 55, who has worked at Boeing for 13 years, figures his raise is only about nine percent after Boeing dropped the annual bonus.

Some workers also expressed anger about Dennis Muilenburg and Dave Calhoun, two former CEOs who received multi-million dollar compensation even as the company faced turmoil upon their departure.

"Striking isn't ideal, but it's for the best for your long-term well-being," said Joe Philbin, a structural mechanic who has been at Boeing for six months.

Philbin said he will work side jobs if a strike drags out, but that he and his wife have been holding off on having kids until the situation stabilizes.

"(Boeing) is a huge company, they can survive paying the people who do the work a little more," he said.

- Big impact from strike? -

The IAM's most recent stoppage, in 2008, lasted 57 days.

According to analysts at TD Cowen, a 50-day strike would deprive Boeing of $3-3.5 billion in cash flow and would have a $5.5 billion impact on revenue.

The company's stock was down four percent in pre-market trading on Friday.

Richard Aboulafia, managing director of the AeroDynamic Advisory consultancy, said a lengthy strike would damage Boeing's turnaround prospects, but noted that a 2023 strike at Boeing supplier Spirit AeroSystems lasted less than two weeks.

Boeing has been under renewed scrutiny since a January incident in which a fuselage panel blew out of an Alaska Airlines Boeing 737 MAX plane mid-flight, necessitating an emergency landing.

Holden said he looked forward to getting back to the bargaining table.

Thursday's vote "sends a strong message that our members deserve better," he said.

J.Pereira--PC