Boeing has extended a second contract offer to the union representing factory workers in the company’s fighter aircraft assembly unit, with a potential strike just days away.
Machinists at Boeing’s fighter production hub in the greater St Louis, Missouri-area rejected an initial offer from the aerospace giant on 27 July, just hours before their existing contract expired.
That triggered a seven-day waiting period, after which the 3,200 workers could walk off the job on 4 August if an agreement has not been reached.
A work stoppage would impact production of Boeing’s F-15EX fighter, F/A-18E/F naval fighter, T-7A trainer and MQ-25 unmanned refueller, along with assembly of precision munitions.
The International Association of Machinists and Aerospace Workers (IAM), which represents the St Louis workforce, did not reveal what led its members to reject the initial contract offer, which IAM leadership had endorsed.
Now, Boeing has come back with what the company describes as its “last, best and final offer” to members of IAM unit 837.
Notably, the airframer appears to be playing hardball with its workers, with a company official telling FlightGlobal the new offer does not feature any new enhancements to proposed pay and benefits, as compared to its first offer.
That proposal already included a freeze on employee cost sharing for healthcare, additional paid time off and increasing the average wage from $75,000 to more than $102,000.
The new offer does reflect some union demands around predictability of shift scheduling, while also front-loading employer pension contributions earlier in a worker’s tenure at the company.
“We have carefully considered and responded to the feedback from our employees and the union,” says Dan Gillian, general manager of Boeing’s air dominance unit and the company’s senior executive in St Louis.
“This is our last, best and final offer, which is the richest we’ve ever proposed for IAM 837,” Gillian adds. “It’s time we come together and move forward to support the mission ahead.”
The proposed contract does offer significant pay increases over the four-year period covered, as did the previously rejected offer.
Boeing says the deal would represent a 20% general wage increase, while IAM leadership has said the total package would deliver a 40% increase in total compensation for many workers.
That includes a one-time $5,000 lump-sum bonus.
However, in its latest, and allegedly ultimate offer, Boeing has added a caveat that the one-time bonus will be forfeited if employees fail to ratify a contract before 4 August.
That is perhaps a lesson learned from the costly and protracted strike by 33,000 of Boeing’s commercial aircraft machinists in 2024.
During that 53-day walkout, Boeing repeatedly came back to the table with increasingly generous offerings, escalating from an initial 25% raise to almost 40% in the final contract.
In the process, Boeing lost some $5.5 billion due to missed aircraft deliveries.
The lack of a wage increase in the second offer, combined with the expiring bonus incentive, would seem to be an effort at dissuading the union from thinking that a drawn out negotiation will automatically deliver better results.
Notably, the fighter production unit in St Louis is roughly 10% the size of the commercial workforce that went on strike in Washington state last year.
Boeing chief executive Kelly Ortberg recently cited that point as he sought to downplay the risk of another strike.
“The order of magnitude of this is much, much less than what we saw last fall,” Ortberg noted during Boeing’s second quarter earnings release on 29 July.
“I wouldn’t worry too much about the implications of the strike. We’ll manage our way through that,” he added.
Gillian says Boeing has activated its strike contingency plan, although the company declines to share what measures that includes.
The union did not immediately respond to a request for comment on the latest offer, including an inquiry about when a member vote on the contract will be held.
