Boeing's U.S. West Coast factory workers walked off the job early on Friday after overwhelmingly rejecting a contract deal, halting production of the planemaker's strongest-selling jet as it wrestles with severe output delays and heavy debt, reports Joe Brock and David Shepardson.
The first strike since 2008 comes as the planemaker is under heavy scrutiny from U.S. regulators and customers after a door panel blew off a 737 MAX jet mid-air in January.
The mounting crises hit Boeing's stock and sparked a leadership upheaval. The shares fell 2.8% in U.S. pre-market trading on Friday, paring some earlier losses. The stock has lost nearly 38% so far this year, losing $58 billion in market value. Shares in Spirit Aerosystems, the supplier Boeing is buying, fell 1%.
New CEO Kelly Ortberg was brought in just weeks ago to restore faith in the planemaker and proposed a deal including a pay rise of 25% over four years, far lower than the 40% workers had demanded.
Roughly 30,000 International Association of Machinists and Aerospace Workers (IAM) members who produce Boeing's top-selling 737 MAX and other jets in the Seattle and Portland areas voted on their first full contract in 16 years, with 94.6% rejecting it and 96% favouring a strike in a two-part ballot.
"This is about respect, this is about addressing the past, and this is about fighting for our future," said Jon Holden, who headed the negotiations for Boeing's largest union, before announcing the vote result on Thursday evening. The union was going to get back to the table as quickly as it can, Holden told reporters, without saying how long he thought the strike would last or when talks would resume.
Boeing said in a statement that it was ready to get back to the negotiating table, a sign that it was ready to sweeten the deal. "The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement," the planemaker said in a statement.