Boeing Labor and Management Reach Tentative Wage Agreement... Strike Likely Averted

Amid a series of passenger plane accidents putting it in a management crisis, American aircraft manufacturer Boeing and its labor union have reached a tentative agreement on a wage increase. This came five days before a strike was expected.

On the 8th (local time), according to foreign media including The Wall Street Journal (WSJ), Boeing and the International Association of Machinists and Aerospace Workers (IAM) Local 751 each issued statements announcing a tentative agreement on a negotiation plan to increase wages by 25% over four years.

The IAM Local 751 is Boeing's largest union representing 32,000 Boeing workers in the U.S. Northwest coastal region, including Seattle, where Boeing's headquarters is located. The tentative agreement also includes manufacturing Boeing's next commercial aircraft at factories in the Northwest coastal area and strengthening retirement benefits.

Stephanie Poppe, head of Boeing's Commercial Airplanes division, said in a message to employees that "this proposal will provide the largest wage increase in history, reduce healthcare costs, increase the company's pension contributions, and improve work-life balance." The IAM Local 751 stated, "While it was impossible to succeed in every aspect, this tentative agreement is the greatest achievement in the union's history."

With the tentative agreement on the wage negotiation reached that day, Boeing was able to avoid the strike it was facing for the time being. Previously, as the existing wage negotiation contract was set to expire at midnight on the 12th, there were expectations that the union could go on strike as early as the 13th. However, WSJ explained that "if union members reject the tentative agreement and two-thirds vote in favor of a strike, the strike will still take place."

This tentative agreement between Boeing and its labor union came amid the company's crisis following a series of accidents involving the 737 Max model. Earlier, Boeing posted a net loss of $1.44 billion (approximately 1.9 trillion KRW) in the second quarter. By the end of this year, Boeing must meet a production schedule of 38 units per month of the 737 Max model. WSJ reported that even a short-term strike could significantly impact the increasing demand for passenger planes.