Boeing Union announces it is approving the contract and ending the seven-week strike

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Striking workers at Boeing agreed to a new contract proposal on Monday, ending a more than seven-week shutdown that had cost the struggling aviation giant billions.

The International Association of Machinists and Aerospace Workers (IAM), District 751, said it accepted the offer by a majority of 59 percent after rejecting two previous offers.

The move will send about 33,000 employees back to work in the Seattle area and restore operations at two major assembly plants as Boeing tries to recover from several setbacks.

The contract includes a 38 percent wage increase, a $12,000 signing bonus and provisions to increase employer contributions to a 401K retirement plan and contain health care costs.

However, the contract does not restore Boeing's previous pension plan, which older workers had sought.

Jon Holden, head of the Seattle union, described the agreement as a victory for workers determined to offset more than a decade of stagnant wages from previous negotiations that angered many rank-and-file workers.

“The strike will end and now our job is to get back to work and start building the planes, raising the tariffs and bringing this company back to financial success,” Holden said at a news conference.

According to a press release from IAM, Holden described the deal as “rebalancing the scales in favor of the middle class” after previously making concessions to the company.

Boeing CEO Kelly Ortberg welcomed the ratification, adding that management and workers must work together as “part of the same team,” the company said in a statement.

“We can only move forward if we listen and work together,” Ortberg said. “There is still much work ahead to return to the excellence that made Boeing an iconic company.”

The news was also welcomed by President Joe Biden, who congratulated the union on the wage increase and provisions that “improve workers' ability to retire with dignity,” a White House statement said.

“Good contracts benefit workers, businesses and consumers – and are key to growing the American economy from the center out and from the bottom up,” Biden said.

Boeing employees can return as early as November 6th and must be back at work by November 12th, the IAM announced on the social media platform X.

The strike had worsened Boeing's already precarious situation following an incident in January in which a fuselage panel exploded during the flight of an Alaska Airlines 737 MAX.

There were no major injuries, but the incident plunged Boeing back into crisis after two previous fatal MAX crashes, with U.S. aviation safety regulators limiting production output until the company sorted out its problems.

In March, Boeing announced a management shakeup that included the resignation of CEO Dave Calhoun, who was replaced in August by former Rockwell Collins boss Ortberg.

Ortberg warned that a turnaround at Boeing would take time given its difficulties, which also include major cost management problems in defense contracts and troubled space missions.

When Boeing reported a whopping $6.2 billion quarterly loss in October, Ortberg described the need for a “fundamental culture change” at Boeing and said he was reviewing the company's portfolio with the goal of downsizing its mission to restore excellence .

But the IAM strike had jeopardized the restructuring efforts under the new CEO.

Jo-Ellen Pozner, an associate professor at Santa Clara University's business school, had warned before the vote that further rejection by IAM employees could have plunged the company into a deeper crisis.

But with the treaty now ratified, “there is a path forward,” she said.

The IAM strike was sparked by workers' desperation after more than a decade of near-stagnant wages – a problem exacerbated by higher inflation in recent years and higher costs of living in the Seattle area, a growing tech hub.

The strike recently surpassed the United Auto Workers' strike against Detroit automakers in 2023 and became the costliest in the 21st century, according to the Anderson Economic Group, which estimated total economic damage at $11.6 billion.