A Rising Tide Lifts All Airframes

Boeing’s fortunes—in every sense—are on the rise. The 2022 Farnborough Airshow saw the plane-maker secure 237 firm orders; deals with Delta, ANA, and Qatar airlines for 175 MAX variants effectively resuscitated Boeing’s long beleaguered 737 MAX program.

What’s more, the FAA, on July 29th, approved the aerospace titan’s plan to correct its 787 production woes, thereby greenlighting the long-awaited recommencement of Dreamliner deliveries. That such a winning-streak would see Boeing’s luck run out seemed a certainty—but Big “B’s” luck held.

In a decisive refutation of the gambler’s fallacy, Boeing avoided a crippling work stoppage at its St. Louis defense manufacturing hub when nearly 2,500 machinists who’d previously voted to strike accepted a last-minute contract offer from the airframer.

The new contract provides Boeing workers a choice between a taxable $8,000 cash bonus and a deposit in the same amount in a 401(k) account. Under the new agreement, Boeing will automatically put the equivalent to 4% of a worker's pay into his 401(k) each year. The contract does, however, do away with the company’s dollar-for-dollar 401(k) match—in lieu of which, Boeing will match 75% of the first 8% of employee contributions.

In addition to revised retirement provisions, the new contract includes a $2-per-hour base-wage increase for all employees—which equates to an average 7.2% hike, Workers at Boeing’s St. Louis-area facilities earn an average of $29.42-per-hour—so says the International Association of Machinists and Aerospace Workers District 837, the union by which Boeing’s St. Louis machinists are represented.

Boeing made its offer during a marathon, overnight bargaining session on 30 July, averting a strike set for two days later. Rank-and-file workers had rejected the company’s initial offer at the urging of union leadership. The negotiations were an early test of labor relations under Boeing Chief Executive Officer Dave Calhoun, and a precursor to negotiations with a much larger IAM collective bargaining unit that represents upward of thirty-thousand Seattle-area mechanics.

On 27 July, Boeing warned in a quarterly filing that “ … a prolonged strike could disrupt our St. Louis based operations and adversely impact revenues, earnings and cash flows.” A week later, Boeing brass changed their tune, asserting in an emailed statement: “We’re pleased with the outcome of the vote, and we look forward to our future here in the St. Louis area.”

FMI: www.boeing.com