Boeing ends strike after 7 weeks… 38% wage increase over 4 years

The union at American aircraft manufacturer Boeing accepted a 38% wage increase over four years, ending a strike that lasted more than seven weeks.

According to Bloomberg News on the 4th (local time), Branch 751 of the International Federation of Mechanical and Aerospace Workers (IAM), Boeing’s largest union, announced that about 59% of union members voted in favor of the labor contract with this content.

The union said that about 26,000 of the 33,000 striking workers participated in the vote and evaluated it as a ‘victory.’ According to this labor-management agreement, the average annual salary of engineers is expected to increase from $75,608 (about 104.23 million won) to $119,309 (about 164.47 million won) four years later.

The Boeing union has been on strike since September 13, demanding a 40% wage increase. This is the first Boeing union strike in 16 years since 2008.

With the end of the strike, hourly workers at factories in Washington, Oregon, and California must begin returning as early as the 6th and complete their return by the 12th.

The market estimates that this strike resulted in a loss of about 100 million dollars (about 137.9 billion won) in sales per day. Analysts at investment bank Jefferies predicted that labor costs would increase by $1.1 billion (about 1.5169 trillion won) over four years.

The strike has ended, but sources said it would likely take several weeks to ramp up aircraft production and improve cash flow. Before the strike, the production target for the 737 Max was 38 units per month, but it was expected to remain in the single digits for the time being.

Boeing has been under investigation by authorities for a series of accidents, including a part of the fuselage of a 737 Max 9 airliner falling off mid-flight in January, and the strike has disrupted aircraft production and delivery. Boeing announced that it plans to lay off 17,000 people, or 10% of its total employees, saying it expects losses to increase in the third quarter due to the strike.

Also, on the 28th of last month, it began raising funds worth about $24 billion (about 33 trillion won) to prevent its downgrade to speculative grade.

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