Boeing said Monday it made a "best and final offer” to striking machinists that includes bigger raises and larger bonuses, but the workers' union said the proposal isn't good enough and there won't be a ratification vote before the American planemaker's deadline at the end of the week.
The union complained that Boeing publicized its latest offer to nearly 33,000 striking workers without first bargaining with union negotiators.
Boeing is under intensifying pressure to end the strike that could cost it several billion dollars, fraying the company's already-strained finances and threatening a downgrade of its credit rating.
"Boeing does not get to decide when or if you vote,” leaders of the International Association of Machinists and Aerospace Workers District 751 told members Monday night. "The company has refused to meet for further discussion; therefore, we will not be voting” on Friday, as Boeing insisted.
Boeing said that after two days of talks last week with federal mediators, it failed to produce an agreement, "we presented a best and final offer that made significant improvements and addresses feedback from the union and our employees.”
The new offer is more generous than the one that was overwhelmingly rejected earlier this month.
The company said the offer includes pay raises of 30% over four years, up from 25% in the first proposal. The union originally demanded 40% over three years.
The new offer – and labeling it a final one – demonstrates Boeing’s eagerness to end the strike that began Sept. 13. The company introduced rolling furloughs of non-unionized employees last week to cut costs during the strike.
The strikers face their own financial pressure to return to work. They received their final paychecks last week and will lose company-provided health insurance at the end of the month, according to Boeing.
The company said its new offer is contingent on members of the machinists' union in the Pacific Northwest ratifying the contract by late Friday night, when the strike will be a little over two weeks old.
The union, which represents factory workers who assemble some of the company’s bestselling planes, waited several hours before pushing back Monday night.
"This proposal does not go far enough to address your concerns, and Boeing has missed the mark with this proposal,” the union told members. The group added that it will survey members about the new offer.
"Logistically, we don't have the ability to set up a vote for 33,000 people in a few days like that anyway. Plus, it missed the mark on many of the things our members said were important to them," said Jon Holden, the president of IAM District 751.
"We are not obligated to vote (on) their offer," Holden said in an interview with Reuters. "We may, down the road. But our hope is that we can get into some discussion so we can actually address the need of our members."
He said the Boeing proposal did not fully address priorities around retirement, wages and other issues.
Boeing's latest offer includes upfront pay raises of 12% plus three annual raises of 6% each.
It would double the size of ratification bonuses to $6,000. It also would keep annual bonuses based on productivity. In the rejected contract, Boeing sought to replace those payouts with new contributions to retirement accounts.
Boeing said average annual pay for machinists would rise from $75,608 now to $111,155 at the end of the four-year contract.
The new offer would not restore a traditional pension plan that Boeing eliminated about a decade ago. Striking workers cited pay and pensions as reasons why they voted 94.6% against the company’s previous offer.
Boeing also renewed a promise to build its next new airline plane in the Seattle area – if that project starts in the next four years. That was a key provision for union leaders, who recommended adoption of the original contract offer, but one that seemed less persuasive to rank-and-file members.
The strike is likely already starting to reduce Boeing's ability to generate cash. The company gets much of its cash when it delivers new planes, but the strike has shut down production of 737s, 777s and 767s. Work on 787s continues with nonunion workers in South Carolina.
Boeing's commercial planes chief, Stephanie Pope, had told workers before the strike that the company had held nothing back and that its offer at that time was the best deal they would get.
"Employees knew Boeing executives could do better, and this shows the workers were right all along," IAM President Brian Bryant said in a statement.
On Friday, Boeing began requiring thousands of managers and nonunion employees to take one week off without pay every four weeks under the temporary rolling furloughs. It has also announced a hiring freeze, reduced business travel, and decreased spending on suppliers.
The money-saving measures are expected to last as long as the strike continues.
