Boeing threatens strike as workers vote on contract By Reuters

By Joe Brock and Allison Lampert

SEATTLE (Reuters) – Workers at Boeing's U.S. West Coast factories will vote on Thursday on a much-criticized new contract and a possible strike, increasing pressure on the planemaker as it struggles with chronic production delays and mounting debt.

A potential strike starting Friday would be a major early blow to new Chief Executive Kelly Ortberg, who was hired last month to restore confidence in the planemaker after a door panel on a nearly new 737 MAX jet exploded in midair in January.

Beginning at 5 a.m. PT (1200 GMT), roughly 30,000 workers who produce Boeing's 737 MAX, 767 and 777 airplanes in the Seattle and Portland areas will vote on their first comprehensive contract in 16 years.

Voting will close at 6 p.m. Pacific time and the result will be announced tonight, the International Association of Machinists and Aerospace Workers (IAM) said. If a strike is approved, it could begin at midnight.

The proposed deal includes a 25% across-the-board pay increase, a $3,000 signing bonus and a commitment to build Boeing's next commercial airplane in the Seattle area, provided the program launches within four years of the contract.

Although IAM leaders urged members to accept the deal on Sunday, workers responded angrily to the terms, with many arguing for the 40 percent wage increase originally demanded and lamenting the loss of an annual bonus.

Workers protested this week at Boeing factories in the Seattle area that assemble Boeing's MAX, 777 and 767 jets, some banging pots and pans and honking horns, two employees said.

Following a meeting to discuss the contract at IAM's Seattle office on Wednesday, six Boeing employees told Reuters they would vote in favor of striking and were confident most union members would do the same.

“I'm willing to strike as long as it takes to get everything we deserve,” said Josh King, a 36-year-old quality inspector, dismissing Boeing executives' claim that they had offered the best deal possible.

“Normally a strike does not bring a worse offer, it always brings a better offer.”

In a sign that some workers are already preparing for picket lines, one union member left the meeting with a sign under her arm that read: “On strike against Boeing.”

ORTBERG'S PRESENTATION

Boeing shares have fallen 36% this year amid concerns about safety, production and a $60 billion debt load. A strike would deepen the financial problem and increase delays in delivering planes to airlines already struggling with capacity shortages.

According to a TD Cowen note, a 50-day strike could cost Boeing between $3 billion and $3.5 billion in cash. Boeing's last strike, in 2008, shut down plants for 52 days and hit revenue by about $100 million per day.

Ortberg sent a letter to workers on Wednesday, urging them to sign the agreement for the good of the company.

“A strike would jeopardize our shared recovery, further erode our customers' trust and undermine our ability to determine our future together,” the letter said.

The labor talks are a key test for Ortberg, who met with the union's top negotiator after arriving in August with a pledge to improve labor relations and safety and increase production of Boeing's best-selling 737 MAX jetliner.

Ortberg and Boeing Commercial Airplanes chief Stephanie Pope toured the company's aircraft assembly plants in Everett and Renton this week to speak with workers about the proposed deal, a source said.

Harold Wilson, a Boeing machine repair mechanic, said he had mixed emotions about the contract and wanted to see better pensions and higher wages for younger workers.

“From the outside, I don't see the deal happening. I don't think we'll be here on Friday,” Wilson said.

“I think Boeing will struggle again.”