Boeing's Largest Union Pushes for 40% Pay Hike

Boeing's largest union, the International Association of Machinists and Aerospace Workers (IAM), is demanding a 40 percent pay increase over the next three to four years for its 32,000 members. The call comes in response to the ongoing 737 Max crisis, which has caused significant manufacturing issues and labor tensions.

The union's current request is partly rooted in a contentious 2014 agreement where workers sacrificed pensions and accepted minimal raises. That deal left many union members feeling disenfranchised and eager for better terms as the existing contract nears its expiration.

Boeing's 737 Max crisis has further strained its relationship with its workforce. The temporary grounding of the jetliner, following the fatal crashes of Lion Air and Ethiopian Airlines flights in 2018 and 2019, respectively, led to significant financial losses and severely damaged Boeing's reputation.

While the company has been working to resolve these issues, a recent near-catastrophe involving an Alaska Airlines Max 9 has reignited concerns over manufacturing quality and safety protocols.

"Our goal is to negotiate a contract that we as a union leadership and our members can accept. We don't take going on strike lightly. But we're willing to do it," said Jon Holden, president of IAM District 751.

The union is demanding the pay rise as part of a deal to secure work for the next 50 years as the company deals with a cascading series of safety and production scandals.

Newsweek reached out to the IAM for comment via email on Wednesday.

The union is also seeking a three or four-year agreement with an explicit guarantee that a new narrow-body plane will be built in Seattle, preventing the company from cutting costs by shifting production elsewhere.

Additionally, Holden believes that the IAM deserves a seat on Boeing's 13-member board. "I have to get that security piece, and it can't be up to them at some point in the future to threaten us to move it somewhere else. This is our only opportunity, and the time is right now," he said in an interview with Fortune.

The union's demands are bolstered by a resurgent U.S. labor movement and a scarcity of qualified aerospace workers. Boeing, still reeling from the financial and reputational damage inflicted by recent production problems, now faces the added pressure of stabilizing its workforce and addressing long-standing grievances.

On Thursday, U.S. investigators sanctioned the company for disclosing details about a federal probe into the case of a door plug blowout that left a gaping hole in an Alaska Airlines Boeing 737 Max 9 in January.

Ticking Clock

Contract negotiations with the machinists' union began in March and are expected to continue until September, when the existing 10-year agreement expires.

Sen. Josh Hawley (Republican) speaks during a Senate Homeland Security Subcommittee on Investigations hearing featuring testimony from Boeing CEO Dave Calhoun on Capitol Hill June 18, 2024. When questioned, Calhoun said that the union members would "definitely get a raise." Francis Chung/POLITICO via AP Images

The union acknowledged that guarantees on production are not normally part of wage negotiations but said staff have not had a new contract for 15 years and are often forced into accepting poor deals under the threat of losing production work entirely.

A Boeing spokesperson said: "Over the last 10 years, our machinists' pay growth has outpaced inflation every single year, even in the last few years when inflation was high."

A team of 40 IAM negotiators has split into several groups to negotiate with Boeing on work rules and financial issues. On July 17, IAM members will gather at the 50,000-seat T-Mobile Park, home of the Seattle Mariners, to vote on whether to authorize a strike if no agreement is reached by the contract deadline.

The clock is ticking, with the current contract expiring on September 12. If members vote to authorize a strike next month and negotiations remain deadlocked by midnight on that day, IAM leadership can call a strike. The last time that happened was in 2008, resulting in a nearly 60-day shutdown of Boeing's Seattle-area plants.

The company has been under intense scrutiny, with CEO David Calhoun defending its safety record in a Senate hearing earlier this month. Lawmakers have accused Calhoun of prioritizing profits over safety, failing to protect whistleblowers, and receiving excessive compensation.

Despite calls for his immediate resignation, Calhoun has said he plans to step down by the end of the year.

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