Members of Boeing’s largest union approved a new contract on Monday, ending a weekslong strike that was one of the country’s most financially damaging work stoppages in decades.
The contract was endorsed by 59 percent of those voting, according to the union, the International Association of Machinists and Aerospace Workers. The union represents about 33,000 workers, most of whom make commercial airplanes in the Seattle area. More than 26,000 members voted on the contract.
The union, which had resoundingly voted down two previous contract offers from Boeing, said its members might return to work as soon as Wednesday, but must be back by Nov. 12. The strike began on Sept. 13, after the union rejected the company’s first proposal.
“You stood strong, you stood tall and you won. This is a victory,” said Jon Holden, the president of District 751 of the machinists union, which represents the vast majority of the workers covered by the contract.
The vote is a victory for union and company leadership, which had urged members to approve the deal. The union had warned of a risk that future offers from the company could have worse terms than this proposal. Boeing’s chief executive, Kelly Ortberg, said in a message to employees on Friday that it was “time we all come back together and focus on rebuilding the business and delivering the world’s best airplanes.”
Mr. Ortberg, who joined the company in August, is trying to restore Boeing’s reputation and business after multiple setbacks in recent years. Last month, he announced plans to cut about 17,000 jobs, or 10 percent of Boeing’s global work force, and make other changes.
Boeing recently reported that it lost more than $6.1 billion in the three months that ended in September. Last week, it raised more than $21 billion by selling shares to investors, an effort to strengthen its financial position and stave off the loss of its investment-grade credit rating. Moody’s Ratings and Fitch Ratings both described the fund-raising as a positive step, but said they were still reviewing whether to downgrade Boeing’s credit rating to “junk” status, which could raise its borrowing costs.
The contract talks were contentious because workers had grown frustrated with the company’s management. Many were still angry over labor negotiations a decade ago, when the union agreed to let Boeing freeze a pension plan that included guaranteed monthly retirement payouts. Even though the company was unlikely to agree to restore that pension, workers pushed for better benefits elsewhere in the contract to make up for that concession.
The new contract will raise wages more than 43 percent cumulatively over the next four years, an improvement over the nearly 40 percent increase in the previous offer, which was rejected in late October.
There were few other major changes between the two offers, aside from giving workers more flexibility in the form in which they could claim a $12,000 bonus for agreeing to the contract. The previous offer split that amount into a $7,000 cash payout and $5,000 401(k) contribution. The latest contract lets workers choose how much they want to receive as cash and how much they want deposited into their retirement accounts.
Boeing has said the average annual pay of machinists will rise to more than $119,000 by the end of the contract, up from nearly $76,000 today, after those raises and other benefits are taken into account.
The walkout’s financial toll rivals ones involving workers at General Motors in 1998 and at UPS in 1997, according to an analysis by Anderson Economic Group, a research and consulting firm in Michigan. Boeing suffered at least $5.5 billion in lost earnings in the first six weeks of the strike, according to the firm. The total economic fallout, including its effect on Boeing’s suppliers and customers, was more than $9.6 billion.
In response to the strike, Boeing took several cost-cutting measures, including pausing some spending and issuing temporary furloughs for tens of thousands of other employees. Some of the company’s suppliers have taken similar measures.
The contract replaces a 2008 agreement that was reached after a two-month strike and that had been modified and extended multiple times since. That strike contributed to a decline in Boeing’s revenue of about $6.4 billion that year because the company delivered 104 fewer planes than expected.
Most of the striking workers were based at factories in the Seattle area, where Boeing makes several commercial airplanes, including its most popular jet, the 737 Max. The Max accounts for three-fourths of the 6,200 planes Boeing has on order, but production is far short of the company’s target because of a crisis that began in January when a panel blew off a Max plane during an Alaska Airlines flight.
That episode renewed concerns about the quality and safety of Boeing planes five years after two fatal crashes involving the Max. In response to the panel blowout, the Federal Aviation Administration capped Max production to 38 planes per month. Production was well below that number before the strike.
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