"Boeing's largest union rejected a new labor deal Wednesday, extending a six-week strike that has plunged the jet maker into increasing financial peril.
Members of the machinist union voted 64% against a proposed contact that would have delivered a 35% wage increase over four years, union leaders said.
Without a deal, factories that build the 737, 767 and 777 jets remain idled, further sapping the company's revenue and risking more disruption in its supply chain.
The vote came on the same day Boeing warned investors that it would burn through cash into 2025 after burning through more than $10 billion in the first nine months of 2024.
Analysts estimate the walkout is costing Boeing around $1 billion a month.
Credit-ratings firms have warned they may downgrade Boeing into junk status.
Boeing declined to comment.
The strike by 33,000 members of the International Association of Machinists and Aerospace Workers has already rippled beyond Boeing and prompted some suppliers to cut staff or furlough workers. An extended halt in production would further delay aircraft deliveries that airlines need.
Jon Holden, president of the local IAM chapter, said members are angry over years of concessions made under the threat of losing jobs.
They want to see pensions restored or an alternative beyond the company's offer of increased 401(k) payments, he said.
"They haven't gone far enough in other ways to replace it," Holden said.
Ending the stoppage is a priority for Boeing Chief Executive Kelly Ortberg, who recently set plans to cut 17,000 jobs and sell at least $10 billion in shares to plug the company's cash drain.
Before the vote, Ortberg said the company was "feverishly working to find a solution that works for the company and meets our employees' needs."
The proposed 35% wage increase was up from Boeing's original offer of 25%. Both offers were rejected by employees in the Pacific Northwest whose wages haven't kept up with the cost of living in the area.
The average wage for a Boeing machinist was about $75,000 under the prior contract.
The revised proposal included a $7,000 ratification bonus and the restoration of annual bonuses that were eliminated in the initial proposal.
The latest offer wouldn't have restored pensions, which was a demand of many members, but something union leaders had said might be out of reach. Boeing would have increased company 401(k) contributions, including a one-time payment of $5,000 to all workers' retirement accounts.
Boeing employee Vaughn Johnson voted against the deal, though he said it was a marked improvement from the first offer.
"It's the first real offer from the company," he said. Johnson, who is married and has a 2-year-old child, said the contract would have brought worker pay even with inflation since the last contract in 2014 but didn't feel like a substantial raise beyond that. "It sounds good but if you factor in buying power, it still seems like we haven't gotten a real raise."
Earlier Wednesday, Boeing posted a $6.17 billion loss, its biggest quarterly loss since 2020, when the pandemic shut down air travel. The company had warned it would take billions of dollars in charges on troubled projects.
The third-quarter results were in line with its warning: a net loss of $9.97 a share on revenue of $17.8 billion." [1]
1. Boeing Union Rejects Pact, Extending Strike. Terlep, Sharon. Wall Street Journal, Eastern edition; New York, N.Y.. 24 Oct 2024: A.1.
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