New Delhi

Boeing machinists have overwhelmingly rejected a proposed labour contract, prolonging a strike that has already lasted more than five weeks and brought most of the company's aircraft production to a standstill in the Seattle area. The contract, which promised a 35 per cent wage increase over four years, was voted down by 64 per cent of union members, according to the International Association of Machinists and Aerospace Workers (IAM) as detailed in a report by CNBC.

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This rejection represents a significant setback for Boeing, which recently reported its largest quarterly loss since 2020, totalling $6 billion, and warned that it will continue to experience cash flow issues through 2025, the CNBC report mentioned further. The ongoing strike is estimated to cost the company around $1 billion each month, highlighting the financial strain caused by the labour dispute.

Boeing’s new CEO, Kelly Ortberg, has emphasised the importance of resolving the strike as a priority for the company’s recovery, particularly in light of its recent safety and quality challenges. "My focus is getting everybody looking forward, getting them back to work, and improving that relationship," Ortberg stated during an interview on CNBC, expressing a desire to return to normal operations.

The machinists, numbering over 32,000 in the Puget Sound region, Oregon, and beyond, initially walked off the job on September 13 after rejecting a prior agreement that proposed a 25 per cent raise. Their union had initially sought a 40 per cent wage increase, reflecting the rising cost of living in the region.

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The latest contract proposal included not only a 35 per cent wage increase but also enhanced 401(k) contributions, a $7,000 bonus, and other benefits. However, the absence of a pension plan, a point of contention following the loss of their previous plan in 2014, remained a sticking point.

In a bid to appease union members, Boeing committed to producing its next aircraft in the Pacific Northwest, reversing a previous decision to move 787 Dreamliner production to a non-union facility in South Carolina. Despite these concessions, Jon Holden, president of IAM District 751, noted at a press conference that the union felt the latest offer did not adequately meet their members' demands. He indicated a willingness to return to negotiations.

The strike's ramifications extend beyond Boeing, affecting its extensive supply chain, which remains vulnerable in the post-pandemic landscape. Spirit AeroSystems, a key supplier, recently announced plans to furlough approximately 700 workers, warning of potential layoffs if the strike continues.

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This labor unrest adds to Boeing's series of challenges, which include increased regulatory scrutiny following a midair incident involving the 737 Max 9. As Boeing works to ramp up production amidst these difficulties, the outcome of this labor dispute remains critical to its future stability and growth.