Union Workers At Boeing Defense St. Louis Set To Strike

Workers at Boeing’s three defense plants in the St. Louis area are preparing to go on strike next Monday, after union members rejected a contract offer that would have reduced the company’s contributions to employee 401(k) retirement plans. 

On Thursday, International Association of Machinists and Aerospace Workers (IAM) District 837 bargaining committee representative Chad Stevenson stated that the union had yet to receive a Boeing response to a counterproposal made by the union on July 24. In a video posted on the TikTok account of the union, Stevenson said that the strike would begin at midnight August 1 should Boeing not make a “fair and equitable” contract offer that was accepted by union members by then. The current contract, negotiated in 2014, expired on July 25.

The counterproposal was sent on the same day as a vote by union members to reject the contract offer and strike. Boeing Defense plants that will go on strike include St. Louis, St. Charles, Missouri, and Mascoutah, Illinois facilities. Boeing Defense aircraft built at these locations include the F-15, F/A-18, T-7A Red Hawk trainer and MQ-25 unmanned tanker.

Stevenson’s statement was made in response to comments made by Boeing CEO Dave Calhoun in a CNBC interview on Wednesday. Calhoun told Squawk on the Street that while he was “disappointed” by the vote to reject the company’s “very strong” offer and go on strike, Boeing would “continue to work with” the union to resolve the dispute. Calhoun declined to elaborate on “contingency plans” Boeing had previously said that it would take, should the strike occur.

IAM District 837 had stated on Sunday that nearly 2,500 members of the union had voted “overwhelmingly” to reject the offer and strike. In a statement announcing the decision, the union said:

“Our members have spoken loudly and with one voice. We reject Boeing’s current contract offer and will strike at all three St. Louis area locations, starting at 12:01 a.m. on Monday, Aug. 1, 2022. We cannot accept a contract that is not fair and equitable, as this company continues to make billions of dollars each year off the backs of our hardworking members. Boeing previously took away a pension from our members, and now the company is unwilling to adequately compensate our members’ 401(k) plan. We will not allow this company to put our members’ hard-earned retirements in jeopardy.”

While Boeing Defense posted a $1.5 billion profit for each of the past two years despite deep losses for Boeing as a whole brought on by the 737 MAX groundings and the COVID-19 pandemic’s effects on air travel, it reported a loss of $929 million for 2022’s first quarter. The losses were brought on by a series of special charges related to higher supplier costs and schedule delays on the Air Force One replacement project, as well as inflationary pressures on the T-7A program. Both programs are contracted on a fixed-price basis, meaning that any unforeseen cost increases will be borne by the company, as demonstrated by Boeing’s loss of over $5 billion due to the KC-46A Pegasus fixed-price program’s troubles.