NEW YORK – Several thousand workers at three Midwest manufacturing plants where Boeing develops military aircraft and weapons went on strike early Monday, potentially complicating the aerospace company’s progress in regaining its financial footing.
The strike started at Boeing facilities in St. Louis; St. Charles, Missouri; and Mascoutah, Illinois, after about 3,200 local members of the International Association of Machinists and Aerospace Workers voted Sunday to reject a modified four-year labor agreement, the union said.
“IAM District 837 members build the aircraft and defense systems that keep our country safe,” Sam Cicinelli, the general vice president of the union’s Midwest division, said in a statement. “They deserve nothing less than a contract that keeps their families secure and recognizes their unmatched expertise.”
The vote followed a weeklong cooling-off period after the machinists rejected an earlier proposed contract, which included a 20% wage increase over four years and $5,000 ratification bonuses.
Boeing warned over the weekend that it anticipated the strike after workers rejected its latest offer, which did not further boost the proposed wage hike. However, the proposal removed a scheduling provision that would have affected workers’ ability to earn overtime pay.
“We’re disappointed our employees rejected an offer that featured 40% average wage growth and resolved their primary issue on alternative work schedules,” said Dan Gillian, Boeing Air Dominance vice president and general manager, and senior St. Louis site executive. “We are prepared for a strike and have fully implemented our contingency plan to ensure our non-striking workforce can continue supporting our customers.”
Boeing’s Defense, Space & Security business accounts for more than one-third of the company’s revenue. But Boeing CEO Kelly Ortberg told analysts last week that the impact from a strike by the machinists who build fighter jets, weapons systems and the U.S. Navy’s first carrier-based unmanned aircraft would be much less than a walkout last year by 33,000 workers who assemble the company’s commercial jetliners.
“The order of magnitude of this is much, much less than what we saw last fall,” Ortberg said. “So we’ll manage through this. I wouldn’t worry too much about the implications of the strike.”
The 2024 strike that shut down Boeing’s factories in Washington state for more than seven weeks at a bleak time for the company. Boeing came under several federal investigations last year year after a door plug blew off a 737 Max plane during an Alaska Airlines flight in January.
The Federal Aviation Administration put limits on Boeing airplane production that it said would last until the agency felt confident about manufacturing quality safeguards at the company. The door-plug incident renewed concerns about the safety of the 737 Max. Two of the planes crashed less than five months apart in 2018 and 2019, killing 346 people.
Ortberg told analysts that the company has slowly worked its way up to an FAA-set 737 Max production cap of 38 per month and expects to ask regulators later this year for permission to go beyond it.
Last week, Boeing reported that its second-quarter revenue had improved and its losses had narrowed. The company lost $611 million in the second quarter, compared to a loss of $1.44 billion during the same period last year.
Shares of Boeing Co. slipped less than 1% before the opening bell Monday.
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