More than 30,000 workers at commercial aircraft maker Boeing Co. (BA) have voted to reject the company’s contact offer and are now preparing to strike.
A strike, which is expected to begin as early as today (Sept. 13), would halt production at one of only two commercial aircraft manufacturers in the world, the other being Airbus SE (AIR).
The strike is the latest problem to impact Boeing and its operations this year.
The company has been struggling in recent months with safety issues that have grounded its aircraft, led to canceled orders, and damaged its reputation.
Workers in Washington State and Oregon voted 94.6% against a new collective agreement put forward by management.
Members of the International Association of Machinists and Aerospace Workers have also voted 96% in favour of strike action, potentially bringing work at Boeing to a standstill.
The contract offer rejected by the unionized workers included 25% wage increases and enhancements to healthcare and retirement benefits.
However, the union had been seeking pay raises of as much as 40%, saying it is needed to help cover the increased cost of living in America.
The contract rejection is a blow to incoming chief executive officer (CEO) Kelly Ortberg, who took over the top job at Boeing only five weeks ago and has promised change at the company.
Boeing had promised to build its next commercial jet in Seattle, Washington to win over workers.
However, none of the efforts on the part of Boeing have been enough to sway the union or its workers, leading to an impending work stoppage.
Analysts at Jefferies (JEF) estimate that a 30-day strike at Boeing will cost the company $1.5 billion U.S. in financial losses.
Boeing has already burned through $8 billion U.S. this year amid its safety and quality crisis, which cost the company’s previous CEO his job.
So far this year, Boeing’s stock has declined 35% and is currently trading at $162.77 U.S. per share. Over five years, the stock is down 57%.
