64% of Boeing machinists vote against the company's latest contract offer, the strike continues

EVERETT, Wash. – Over 30,000 Boeing employees voted Wednesday night to reject the company's latest contract offer, meaning they would continue their more than month-long strike.

The International Association of Machinists and Aerospace Workers said 64% of its members opposed a contract that would have increased wages by 35% over four years and also provided $7,000 in signing bonuses.

The vote began just hours after Boeing reported a $6.2 billion loss in the third quarter, largely due to huge writedowns in both its aircraft and defense businesses. The vote ended on Wednesday at 5 p.m.

Before the doors opened at a hall near the Boeing factory in Renton, workers lined up outside where there were isolated calls to continue the strike.

“It will be a split vote,” predicted Brian Hatcher, who has worked at Boeing for 15 years and said he voted to reject the offer largely because it would not bring back pensions frozen a decade ago.

Theresa Pound, a 16-year Boeing veteran, also voted against the deal. She said the health plan has gotten worse, with higher premiums and more out-of-pocket costs, and her expected retirement benefits won't be enough, even when combined with a 401(k) retirement account.

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“I put more time into this place than I ever should have. I literally have blood, sweat and tears from working at this company,” said the 37-year-old. “I'm thinking about working until I'm 70 because of the possibility that I won't be able to retire because of what's happening in the market.”

Frederic Scholter, an airline inspector who worked at Boeing for 48 years and experienced six strikes, voted yes.

“I think if Boeing gives us good money to invest ourselves, it's up to you to plan your retirement that way,” he said. “It wasn’t a good contract at first. I think this contract meets us halfway.”

The union said it expects to announce the results of the vote on Wednesday evening. Union leaders, who were burned last month when they supported an earlier proposal that members rejected by 94.6%, did not support the latest proposal but said it deserves consideration.

If the contract is approved, the 33,000 striking Boeing employees would have returned to work between Friday and October 31.

The strike, which began Sept. 13, served as the first test for Boeing CEO Kelly Ortberg, who became CEO in August.

In his first address to investors on Wednesday, Ortberg said Boeing needed “a fundamental culture change” and laid out his plan to revive the aerospace giant after years of heavy losses and reputational damage.

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Ortberg reiterated in a message to employees and on the conference call that he wanted to “redesign” the relationship between management and workers “so that we are no longer so far apart in the future.” He said company leaders need to spend more time on factory floors to know what's going on there and “prevent problems from getting worse and work better together to identify, fix and understand the root cause.”

Ortberg, a Boeing outsider who previously ran Rockwell Collins, a maker of avionics and flight controls for airline and military aircraft, said Boeing is at a crossroads.

“Confidence in our company has waned. We have too much debt. We have had serious performance deficiencies across the company that have disappointed many of our customers,” he said.

But Ortberg also highlighted the company's strengths, including a backlog of aircraft orders worth half a trillion dollars.

“It will take time to return Boeing to its former heritage, but with the right focus and culture, we can once again be an iconic company and a leader in the aerospace industry,” he said.

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In recent weeks, Ortberg announced mass layoffs — about 17,000 people — and a plan to raise enough cash to avoid a bankruptcy filing.

Boeing hasn't had a profitable year since 2018, and Wednesday's numbers marked the second-worst quarter in the manufacturer's history. Boeing lost $6.17 billion in the period ended Sept. 30, an adjusted loss of $10.44 -dollars per share. Analysts surveyed by Zacks Investment Research had expected a loss of $10.34 per share.

Sales totaled $17.84 billion, in line with Wall Street estimates.

The company burned through nearly $2 billion of cash in the quarter, weakening its balance sheet, which is burdened with $58 billion in debt. Chief Financial Officer Brian West said the company would not generate positive cash flow until the second half of next year.

Shares of The Boeing Co. fell 2% in regular trading Wednesday.

Boeing's fortunes deteriorated after two of its 737 Max planes crashed in October 2018 and March 2019, killing 346 people. Safety concerns arose again in January of this year when a panel on a Max blew off during an Alaska Airlines flight.

Ortberg must convince federal regulators that Boeing is improving its safety culture and is ready to ramp up production of the 737 Max, a crucial step to raise much-needed money. However, this cannot happen until the striking workers return to their jobs.

Boeing steadfastly resisted the union's demand to restore a traditional pension plan that was frozen in 2014. However, workers who were covered by that plan would receive a slight increase in their monthly pension payments under the latest offer.

“Pension should have been the top priority. “We all said this was our top priority, along with pay,” Larry Best, a customer quality coordinator with 38 years at Boeing, said on a picket line outside a Boeing factory in Everett, Washington, on Tuesday. “Now is the best opportunity at the best time to get our pension back and we all need to stay out and get involved.”

Lindsey Wasson in Everett, Washington, contributed to this report. Koenig reported from Dallas.