Thousands of Boeing factory workers are heading back to work after striking employees accepted the aerospace manufacturing giant’s latest contract offer, effectively ending the multi-week labor dispute.
Fifty-nine percent of machinists voted in favor of the new labor deal, the International Association of Machinists (IAM), representing more than 32,000 machinists, announced Monday evening.
“The strike has ended,” the union said in a post on social media.
Workers can return to work as early as the first shift on Nov. 6, the union said.
Thousands of workers have been on strike since Sept. 14.
The company said average annual pay for members would reach $119,300 by the end of the contract, up from the current average of $75,600.
The newest contract does not restore the pension plans IAM lost a decade ago, which was one of the leading factors behind the rejection of the earlier offer.
In 2014, Boeing eliminated the defined-benefit pension plan for IAM members and replaced it with 401(k) plans. The former pays retirees a fixed monthly benefit until their death, while the latter matches a portion of workers’ contributions to the account.
Boeing has stated that it will not reactivate a defined-benefit pension plan.
“There is no scenario where the company reactivates a defined-benefit pension for this or any other population,” the company said in an Oct. 15 statement. “They’re prohibitively expensive and that’s why virtually all private employers have transitioned away from them to defined-contribution plans.”
Ahead of the vote, union leadership stated that these would be the best terms IAM members would receive, advising them to “lock in these gains and confidently declare victory.”
“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” the IAM said in a statement. “We are at that point now and risk a regressive or lesser offer in the future.”
Boeing CEO Kelly Ortberg urged workers to return to work.
Boeing recently raised up to $22 billion to strengthen its battered finances and prevent a downgrade to its investment-grade credit rating. The company’s balance sheet has deteriorated amid the month-long labor dispute and suspension of airplane production.
Since taking the reins in August, Ortberg has been working to implement a turnaround initiative. One of the first actions was reducing headcount by 10 percent, or 17,000 employees.
A union official called Boeing’s layoffs “short-sighted,” alluding to the company’s production backlog of 6,000 airplanes.
“They need us to build them,” the union representative told reporters shortly after announcing the vote tally. “I hope the company will reconsider.”
White House officials and market watchers say the seven-week job action contributed to the disappointing October jobs report.
Some economic observers think it will be a blip in the radar of a solid labor market.
“The nonfarm payrolls may not be great on its face, but this recent drop should be a temporary miss as rebuilding and activity picks up with after the Hurricanes and likelihood of the Boeing strike ending,” said Bryon Anderson, the head of fixed income at Laffer Tengler Investments, in a note.
During the Nov. 4 trading session, Boeing stock rose as much as 1 percent to about $156 a share. Year-to-date, shares are down 38 percent.
