Boeing Union Chief Warns Members ‘Are Angry’ As New Contract Talks Begin

Boeing’s nightmare start to the year is about to get even more challenging. 

A decade-long deal between the company and its largest labor union is due for renewal in September. Talks with the Seattle-area machinists group started late last week to find a new agreement.

A six-month lead time to conclude the deal might sound generous, but with the union demanding pay raises of over 40%, the process is unlikely to be quick or easy.

The timing of the renewal could hardly be worse for Boeing. Alongside well-documented internal problems, the company is also battling wider macroeconomic headwinds. Labor shortages, inflation, and post-pandemic supply chain issues are all hitting hard.

“People are angry, and we’re going to have that be part of the leverage we bring to the negotiations,” said Jon Holden, president of District 751 of the International Association of Machinists and Aerospace Workers (IAM).

Expect to hear Holden’s name a lot more in the coming weeks. His organization and its members play a pivotal role in the smooth operation of Seattle-area production facilities for Boeing. 

How Confident is the Union?

The talks were originally due to begin in February. However, they were delayed at Boeing’s request after the Alaska Airlines 737 Max incident on January 5. 

Speaking to the media after its first formal meeting with Boeing, Holden said he believed the union is in “a very powerful position.”

“Right now we feel we have leverage that is better than any time in our history. We’re going to use that and our members want to use that,” he said. 

Holden said he has been encouraged by large wage increases in other sectors, including U.S. truck drivers and auto workers. 

Is Boeing Facing A Strike?

“There is a path to an agreement – I believe we can [agree] if we bargain in good faith on both sides. We are going to push this company farther than they thought they would go, and we’re going to get a successful agreement. We hope to do that without a work stoppage, that is our goal,” said Holden.

While the union chief insists he wants to avoid strike action, history tells us that Boeing should take any threat seriously. 

This year’s talks are the first time the entire agreement is being re-negotiated since 2008. Back then, deadlock saw union members down tools for eight weeks. 

The disruption cost Boeing hundreds of millions of dollars in delays and associated penalties. Earlier contractual breakdowns with IAM District 751 have also resulted in all-out strike action. 

Is the 737 Max a Factor?

Holden confirmed that increased scrutiny around Boeing products – and in particular the 737 Max – will influence the talks.

“This time we will be making proposals that we have never made in the past around the safety and quality of the airplane. I guess in decades past, maybe [union] leaders didn’t feel the need.”

The union chief said the ratio of quality assurance personnel to mechanics would also be a key focus for the meetings. “We’ll be looking at any changes to quality assurance manuals, the quality management systems, we want to bargain those changes.”

Holden leads an organization that represents more than 30,000 workers around Puget Sound in Washington State – a critical patch within Boeing’s global operation. 

While tough talk from a union leader is nothing new, the scale of Boeing’s current problems gives the discussions a heightened intensity. 

Holden said the union is seeking to “protect [Boeing] from itself,” adding: “We feel we’re the last line of defense for some of the changes they [Boeing] make. We have the ability to stand up and say this is wrong.”

Asked about recent comments from an ex-Boeing employee about a lack of confidence in the company’s aircraft, Holden said: “We build safe airplanes. Have there been some issues? Yes. We have to address those, we take those seriously. We just have to maintain the health of the manufacturing environment, the quality assurance environment, to make sure we continue to do that.”

What Else is the Union Demanding?

Alongside better pay and conditions for union members, Holden said he also wants a different sort of long-term commitment from Boeing. The IAM 751 president is pressing the company to build its next generation of aircraft in Washington. 

The state was a key production site for the 787 Dreamliner until 2021 when Boeing consolidated manufacturing in South Carolina. This has left the 737 Max as the main source of work for the Seattle area factories. 

“We have to fill our factories with work, we have to ensure we have work for our current members and those that follow behind us. We’ll be focusing on the next airplane programs – we need jobs for 50 years, not just four years,” said Holden.

How Much Influence Does the Union Have?

Figures published in Boeing’s latest 10-K regulatory filing show the company has around 57,000 union members. IAM represents 21% of its total employees.

Asked by reporters if, given Boeing’s recent troubles, he still believes in the company, the union chief was bullish in his assessment: “We believe in ourselves, and there is no Boeing Company without us. We have what it takes to build this company to the level it was, and that’s what our focus will be going forward.”

Following the start of the negotiations, Boeing said in a statement: “We look forward to reviewing the union’s proposal and continuing our discussions in good faith. We’re confident there’s a path to a deal that addresses the needs of our employees while allowing us to compete in a very competitive global market.”

With the current agreement running until midnight on September 12, a red-hot summer of heated discussions is forecast by many.