Boeing faces a possible strike on Friday amid some workers' discontent over a short-term labor agreement By Reuters

Written by Allison Lampert

(Reuters) – Boeing (NYSE: ) faces a possible strike on Friday if most workers at a U.S. factory in the Pacific Northwest vote on Thursday to support a work stoppage and reject a tentative contract that has angered many of them.

About 30,000 workers who manufacture Boeing 737 MAX, 767 and 777 planes in Portland, Oregon, and the Seattle area will vote on their first full contract in 16 years. The chief negotiator of the union admitted that most of the workers are angry because they want a pay rise and other improvements.

However, the path to the strike is still unclear. According to the union, unless a two-thirds majority votes to strike, the agreement is approved, regardless of whether a second vote focusing on the success of the contract is passed.

Workers' dissatisfaction with the tentative deal reached on Sunday has spilled over into some of Boeing's Seattle plants, with workers marching, banging pots and pans and honking horns this week, one worker told Reuters.

According to a note from TD Cowen, a 50-day strike could cost Boeing an estimated $3 billion to $3.5 billion in cash flow. The last strike by Boeing workers in 2008 shut down plants for 52 days and impacted revenues by an estimated $100 million a day.

“What I see is that there are a lot of people who are angry about a lot of issues that they care about a lot,” said Jon Holden, who heads negotiations for Boeing's main union, the International Association of Machinists and Aerospace Workers (IAM). ).

“We can see them voting down this and voting to strike,” Holden, president of IAM's district 751, said in an interview Monday.

The labor talks are a test for new Boeing CEO Kelly Ortberg, who met with Holden after starting in August with a promise to reset union relations, improve safety and ramp up production of Boeing's best-selling 737 MAX passenger plane. Ortberg was at the aircraft maker's plant in Renton, Washington, on Wednesday to discuss a labor-labor agreement, the source said.

Boeing is carrying nearly $60 billion in debt and is facing scrutiny from regulators and customers, after a door plug on the new MAX nearly blew off. Alaska Air (NYSE:) gelled while on the air in January. Shares of the aircraft designer are down 36.5% so far this year.

The proposed deal includes a 25% general pay raise, a $3,000 signing bonus and a promise to build Boeing's next commercial jet at the Seattle site, as long as the project is delivered within four years of the contract.

Holden said workers want a pay rise close to his opening 40% in three or four years, and that some are unhappy about losing an annual bonus that has amounted to about 3.7% of salary over the past 20 years.

Stephanie Pope, who heads the commercial aviation division, told employees in a paper Tuesday that the deal offers “guaranteed money,” as some employees were concerned about how the previous bonus was paid.

“We have consulted in complete good faith with the IAM team representing you and your interests,” Pope wrote. “Let me be clear: We did not keep our eye on the second vote.”

Younger, more recent arrivals at Boeing are expected to play a larger role in the vote because of demographic changes since the pandemic that has brought a wave of departures and retirements from older, more experienced workers, one industry source said.

Of the more than 30,000 Boeing workers represented by District 751, nearly half have less than six years of experience, the union said. That's double the pre-pandemic rate.

The agreement, for example, offers a new parental leave program of up to 12 weeks that Holden said exceeds anything mandated by current state laws in Washington and Oregon.

The union also reduced the amount of mandatory overtime so that workers are not obligated to work consecutive weekends, which is an important issue for young workers.

“We understand the demographics of our bargaining unit very well,” Holden said, adding that the deal covers long-serving employees.

Holden said he believes the interim agreement is the best he can get from negotiations. “The power of our union is held by the members who have the right to vote whether to accept this or not.”