Boeing Strike Over—What Comes Next?

After a 52-day strike, the International Association of Machinists and Aerospace Workers (IAM) and Boeing reached agreement on a new contract that will run for four years instead of an expected three years.

The IAM cited job security and the use of outsourced suppliers as the major issues that drove the labor action. The union noted that as negotiations moved forward also resolved were matters of wage rates, health care benefits for current and future employees, pension improvements and work rule changes designed to improve productivity.

Final agreement was reached over a five-day period that involved participation by Boeing representatives, IAM International President Tom Buffenbarger and the Union’s general vice president, Rich Michalski as well as federal mediators. The Union represents 27,000 employees at Boeing facilities in Kansas, Oregon, Washington and California.

Estimates of losses to Boeing during the course of the strike run as high as $100 million a day. In reflecting on the settlement, Scott Carson, president and CEO of Boeing Commercial Airplanes said, "This is an outstanding offer that rewards employees for their contributions to our success while preserving our ability to compete. I thank both negotiating teams and the federal mediator for their hard work and commitment in reaching this agreement. We recognize the hardship a strike creates for everyone—our customers, suppliers, employees, community and our company—and we look forward to having our entire team back."

The settlement may pay extra benefits for Boeing that is negotiating a new contract with its 21,000 employees who are members of the Society of Professional Engineering Employees in Aerospace (SPEEA). As with IAM, a major issue is outsourcing to third parties. The IAM contract may provide a positive framework for SPEEA negotiations since they have many of the issues resolved in common.

Boeing now hopes to move ahead with the delayed and delayed again production of its 787 Dreamliner passenger plane which is now at least 15 months from beginning delivery for the reported 900 orders for it on the books from airlines around the world.