Boeing in a Dilemma: Contract Negotiations with Union Tentatively Failed

The aviation company Boeing is facing critical days: Following an initially failed attempt to reach agreements on key issues such as wages and pensions, Boeing and the company’s largest union, the International Association of Machinists and Aerospace Workers (IAM), will resume negotiations under the supervision of federal mediators on Wednesday. Last week, 94.6% of the more than 30,000 IAM members, including employees who produce Boeing’s bestseller, the 737 MAX, and other aircraft in the Seattle and Portland regions, voted against the company’s offer. Additionally, an overwhelming majority of 96% indicated that they would prefer to go on strike. The rejected four-year offer included a general wage increase of 25%, significantly below the employees' demand of 40%. Additionally, Boeing had made a firm commitment to build the next commercial aircraft in the Seattle area. A prolonged strike could further strain Boeing's already troubled finances. The company is grappling with a debt burden of $60 billion and urgently requires adequate cash flow to service these liabilities. However, a strike would also significantly impact airlines that rely on Boeing aircraft and suppliers that manufacture components for the jets.