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Boeing workers ratify 3-year contract, averting strike

Members of three St. Louis-area factories rejected an earlier proposal, citing retirement benefits.

The 777 factory line, left, is seen next to the 787 line, right, at Boeing's Everett Production Facility. (Jennifer Buchanan/AP)

Unionized Boeing workers at three St. Louis-area factories voted in favor of the company’s latest contract offer Wednesday, averting a strike that threatened to paralyze the company’s output of crucial military hardware.

A strike by roughly 2,500 members of the International Association of Machinists and Aerospace Workers District 837 would have commenced at midnight had the vote gone against the three-year proposal.

The Machinists rejected the last contract offer on July 25, citing retirement benefits. That proposal included a 10 percent 401(k) match from the company, but workers said that paled in comparison with the pension plans it used to offer.

The new deal features the 10 percent match but also includes an $8,000 lump-sum payment that can be deferred into an employee’s 401(k) plan, and a 14 percent general wage increase. It also improves the company’s sick, parental and funeral leave arrangements and eliminates a two-tiered wage system, according to a release published by the union.

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“At the end of the day, that is what the impending strike was about. Congratulations to IAM District 837 members for standing strong in achieving an agreement that is more fair and just,” Steve Galloway, who is Midwest territory general vice president at IAM.

A Boeing spokesman said the company is “pleased with the outcome of the vote and we look forward to our future here in the St. Louis area.”

The union’s gains underscore the strengthened bargaining power employees have in an economy that is wracked by a broad-based labor shortage. A record number of Americans have quit jobs in the past year — a phenomenon known as the Great Resignation — as the hot labor market afforded them leverage to find better-paying opportunities. Though the pace has slowed, they’re still quitting at elevated levels: U.S. employers had 10.7 million job openings in June, federal data shows.

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The nation’s unemployment rate, meanwhile, remains a low 3.6 percent. The Labor Department will release July employment data on Friday.

At the same time, organized labor has made significant gains this year, with employee campaigns prevailing at some traditionally nonunion companies including Amazon, Apple and Starbucks. Just last week, a Trader Joe’s store in Massachusetts became the first in the more than 530-store chain to vote to unionize, while petitions for union elections are on track to hit their highest level in a decade.

And workers have demonstrated a growing willingness to walk off the job: A labor action tracker maintained by Cornell University counted more than 650 strikes in the past 18 months. A 19-day strike at a Frito-Lay factory in Kansas last year resulted in new requirements guaranteeing workers at least one day off per week. John Deere workers spent a month on strike before agreeing to a contract that improved their wages, and a walkout at Kellogg’s lasted 11 weeks before coming to an end in December.

But strikes in the defense industry are rare, even though significant portions of its factory workforce are unionized. A walkout would be especially disruptive because many of these workers — who often fill highly technical engineering and tooling roles — have security clearances to protect sensitive information that might be of interest to U.S. adversaries.

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The three-year Boeing deal averts a stalemate that could have severely disrupted the U.S. military’s production pipeline. The factories covered by the new contract in St. Louis, St. Charles, Mo., and nearby Mascoutah, Ill. ― are part of Boeing’s Arlington, Va.-based defense, space and security unit, whose work is considered “critical” to national security. They produce military aircraft including the F-15 Eagle and F-18 Hornet fighter jets, the T-7 Red Hawk training jet and the MQ-25 refueling drone.

Those programs collectively generated about $3.5 billion in 2022 revenue for Boeing, according to an analysis by Jefferies investment bank, making up a sizable chunk of Boeing’s $25.7 billion-a-year defense business.

Boeing shares jumped 2.1 percent to close at $166.64 Wednesday amid a broader stock market rally, giving the jet maker a market value near $99 billion. In May, the company announced that it was moving its headquarters from Chicago to Arlington