Boeing workers have officially ratified a new labor contract, bringing an end to a 53-day strike that began on September 13, 2024. On November 5, 2024, a decisive 59% of union members from the International Association of Machinists and Aerospace Workers (IAM) District 751 voted in favor of the agreement, which promises a substantial 43% wage increase over the next four years, including a 13% immediate raise, followed by 9% raises for the next two years and 7% in the fourth year. Additionally, the deal includes a $12,000 ratification bonus, reflecting the union's efforts to secure better compensation for its members [5b3d9432].
The strike had significant repercussions, costing Boeing an estimated $6.5 billion and leading to a total economic impact of over $11.5 billion for the U.S. economy, marking it as the costliest strike in the U.S. in over 25 years [5b3d9432]. Approximately 33,000 employees are set to return to work, with many expected back in factories in Washington, Oregon, and California by November 6, 2024 [5b3d9432].
IAM District 751 President Jon Holden acknowledged ongoing dissatisfaction regarding the loss of the traditional pension plan, which has been a point of contention among some members and a significant factor in previous rejections of Boeing's offers [5b3d9432]. Boeing's annual economic impact is reported to be around $79 billion, underscoring the company's significant role in the economy [49f00122].
In a related development, a group of 53 manufacturing association and state chamber leaders from 42 states had previously urged an end to the Boeing machinist's strike, emphasizing the aerospace industry's importance. Their letter coincided with the labor agreement's finalization, highlighting that the aerospace sector employs over 500,000 people in the U.S. and supports 2.2 million jobs, generating $425 billion in economic activity and exporting $135 billion [e8ca50a5]. In Washington alone, the aerospace industry supported 194,000 jobs and $71 billion in revenue in 2023, with Boeing accounting for 80% of aerospace jobs [e8ca50a5].
Boeing CEO Kelly Ortberg emphasized the need for teamwork and collaboration moving forward, highlighting the importance of rebuilding company culture after the strike [5b3d9432]. With the ratification of the new contract, Boeing's stock rose by 2.8% in after-hours trading, reflecting investor optimism about the resolution of the strike and its implications for the company's future operations [aadfdb1e].
However, the effects of the strike are expected to linger. According to a report from Oxford Economics, industrial output increased by only 0.1%, lower than anticipated, with aerospace output falling by 2.6% in November, following declines of 8% and 6.7% in September and October, respectively [53867a19]. Suppliers such as Ducommun and Spirit AeroSystems are also facing operational recalibrations due to the halted production during the strike [53867a19]. Although Boeing has restarted production on the 737 Max, the recovery is projected to be slow, indicating that the aerospace sector may continue to experience challenges in the months ahead [53867a19].