The IAM strike at Boeing is over. The IAM machinists have voted 59% in favor of the latest contract offer, which was endorsed by union management. Wages will rise 38% over the next four years, along with signing bonuses and better 401K matches. While the pension was not restored, the company offered the ability to take the $12,000 signing bonus as a 401K contribution, which could help retirement security, or as current income.
The supply chain breathed a sigh of relief once the vote was announced, and planned layoffs will likely be rescinded as Boeing will begin re-issuing purchase orders for components by the end of the week. Airlines are happy knowing that a further delay to their aircraft orders will enable them to better plan their schedules and Boeing re-establishes its skyline with new expected delivery times. Our story on United as an example illustrates that impact.
While this is a win for the union, it is also a win for Boeing in minimizing the potential damage a longer strike could have on its supply chain and cash flow. This is a strike that needed to be settled.
In other news, Ryanair reported a drop in profitability, which it blamed on aircraft delivery delays from Boeing. Ryanair was looking for better fuel efficiency from new aircraft that will replace older, less efficient models, raising its costs. At the same time, a lack of capacity is impacting its revenue growth plans and 2025 route structure.
Finally, an interesting piece from Harvard speaks about learning from the ethical leadership failures at Boeing, including those that led to the company pleading guilty to fraud in their ‘sweetheart’ deferred prosecution agreement. The litany of events is quite revealing and demonstrates the need to fundamentally change the Boeing culture, replacing dishonesty with ethical behavior.
Links to today’s key news stories follow:
- Boeing machinists approve new contract, ending strike – KING5
- The Boeing strike vote: the United Airlines example – AirInsight
- One of Boeing’s biggest customers leveled fresh criticism over ongoing 737 MAX delivery delays – Business Insider via MSN
- Ryanair profits drop on Boeing delays and lower fares – Proactive
- Learning from ethical leadership failures at Boeing – Harvard