Boeing Crashes as Workers Go On Strike

Between whistleblowers showing up dead and members being lost in space, I'm surprised this hasn't happened sooner:

Boeing bosses are staring down the barrel.

The twists and turns of the past week paint a picture of managers badly wrong-footed by the depth of fury among workers who tossed out a 25% pay increase deal and launched strike action.

"They probably didn't think that we had enough people for the strike," Kushal Varma, a Boeing mechanic, told Reuters. "But this is a movement of people who are willing to put their livelihoods on the line to get what's fair."

With little time to regroup, and pressure mounting, management enters a fresh week of talks to contain the crisis at the $97 billion U.S. aerospace champion. 

A week ago, Boeing executives believed they'd done enough to secure the pay deal with around 33,000 workers in Washington state, the heart of the company's global manufacturing operations, according to two people directly involved in the talks that have played out at Seattle's upscale Westin hotel.

The company's initial pay increase offer had been about 12%, said the people, who requested anonymity to discuss confidential and unreported details about the horse-trading, though that number gradually crept up during the weeks of negotiations.

But in an 11th-hour concession on Saturday, Sept. 7 to clinch the support of union leader Jon Holden and seal what they expected to be a swift resolution to the dispute, Boeing executives hiked the offer significantly to 25% and pledged to build the company's next commercial jet in the state, the people added.

"Much of it came together in the last four or five hours," Holden told Reuters after the tentative agreement was announced on Sept. 8, adding that he and Boeing management had worked until "the wee hours".

Boeing and the union hailed the deal as "historic" because of the record headline wage hike for the company and the first-of-its-kind plane commitment. It was a spectacular failure.

Three days later, 94% of members of Holden's International Association of Machinists and Aerospace Workers (IAM) rejected the offer and 96% voted to strike.

Reuters interviews with more than 20 people, including Boeing officials, union leaders and factory workers, show how badly the U.S. aerospace champion underestimated the scale of the resentment felt by workers over cost-of-living pressures and pay agreements of previous years.

Boeing and the IAM declined to comment for this article.

The details of the deal's collapse also reveal how trust between Boeing and union leadership has eroded, complicating talks due to resume in coming days.

Two days after Boeing announced its offer, as union member frustration seeped into the media, commercial planes chief Stephanie Pope wrote an open letter to workers, saying the company had held nothing back and this was the best deal they would get.

CEO Kelly Ortberg followed up with an open letter the next day, telling workers that voting against the deal would send them down a path "where no one wins".

Rather than rallying the troops, the letters backfired, according to four workers who said many union members saw them as ultimatums.

"I thought they were unprofessional and threatening," said Josh King, a quality control inspector at a Boeing Seattle factory.

Boeing finance chief Brian West acknowledged the disconnect with staff.

"We had an unprecedented temporary agreement that was unanimously endorsed by union leadership. And over the last few days, it became very clear, loud and clear, with our union members that that offer didn't meet the mark," he told a Morgan Stanley conference at the beachside Ritz-Carlton in Dana Point, California on Friday.

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