Striking Boeing workers rejected a new contract. Here’s what happens next

(SEATTLE) — Boeing machinists overwhelmingly rejected a contract proposal this week, opting to extend a weekslong strike and send negotiators back to the bargaining table.

Sixty-four percent of workers voted against the new contract, according to the International Association of Machinists and Aerospace Workers (IAM), the union representing 33,000 Boeing workers in Washington, Oregon and California.

The outcome follows the resounding defeat of a previous proposal last month, which drew rebuke from more than 90% of union members.

The consecutive “no” votes set the stage for a standoff between Boeing and its workers that will strain the finances of both sides over the coming days and weeks, experts told ABC News. That financial pressure will push the dispute toward resolution but workers appear unlikely to budge without major concessions, they added.

“The union has sent a very clear message to Boeing that it will take significantly more to get a settlement,” Harley Shaiken, a professor emeritus at the University of California, Berkeley, who focuses on labor history, told ABC News.

The proposed contract would have delivered a 35% raise over the four-year duration of the contract, upping the 25% cumulative raise provided in a previous offer overwhelmingly rejected by workers in a vote last month. Workers had initially sought a 40% cumulative pay increase.

The proposal also called for hiking Boeing’s contribution to a 401(k) plan, but it declined to fulfill workers’ call for a reinstatement of the company’s defined pension. The contract would have included a $7,000 ratification bonus for each worker, as well as a performance bonus that Boeing had sought to jettison.

But union leaders said the concessions offered in the proposal were not enough to meet the demands of rank-and-file union members.

“This contract struggle began over ten years ago when the company overreached and created a wound that may never heal for many members,” said Jon Holden, president of IAM District 751 in Seattle, in a statement after the vote. “I don’t have to tell you all how challenging it has been for our membership through the pandemic, the crashes, massive inflation, and the need to address the losses stemming from the 2014 contract.”

Boeing did not immediately respond to ABC News’ request for comment.

Experts who spoke to ABC News forecasted a willingness on the part of Boeing to reenter talks and even revisit key parts of the offer.

Hours before workers cast ballots on Wednesday, Boeing released an earnings report showing the company had lost a staggering $6.1 billion over the most recent quarter, even though most of that period took place before the strike began.

The strike is expected to deepen that financial hole. A 50-day work stoppage would cost Boeing $5.5 billion, investment bank TD Cowen said in a report reviewed by ABC News at the outset of the dispute. So far, the strike has lasted 41 days.

“This rejection adds further uncertainty, costs, and recovery delays,” Bank of America Global Research said in a note to clients on Thursday. “We anticipate further concessions of wages will be required for a deal to pass.”

Financial stress will mount for workers as well, experts said.

Union members have received $250 per week from a strike fund, beginning in the third week of the work stoppage. That compensation marks a major pay cut for many of the employees.

“When strikes go longer than five or six weeks, the financial pressures really start to work on the union rank and file,” Robert Forrant, a professor of U.S. history and labor studies at the University of Massachusetts at Lowell, told ABC News.

While union members remain widely opposed to the latest contract offer, it drew greater support than the first one. That incremental progress may prompt Boeing to continue the strategy of upping worker pay while standing firm in its refusal to reinstate a defined pension, Ryan Stygar, a labor lawyer at San Diego, California-based Centurion Trial Attorneys, told ABC News.

Workers lost a traditional pension plan in a contract ratified by the union in 2014. The union’s demand for reinstatement of the pension may appeal more to longtime employees who feel they’ve lost retirement benefits than younger ones who’ve joined the company since its shift to a 401(k), Stygar said.

“Boeing’s strategy will be to try to exploit that generational divide,” Stygar said, noting that increased pay and a larger ratification bonus may entice younger workers to support a future proposal even if it omits pension reinstatement.

“As the strike goes on and Boeing’s losses accumulate, I think we will see more aggressive negotiation,” Stygar added, saying the standoff could stretch on for another two to four weeks.

“But I don’t have a crystal ball,” Stygar said.

ABC News’ Jack Moore and Ayesha Ali contributed to this report.

Copyright © 2024, ABC Audio. All rights reserved.