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Workers who assemble Boeing planes are on strike. Will that affect flights?

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Workers who assemble Boeing planes are on strike. Will that affect flights?
News

News

Workers who assemble Boeing planes are on strike. Will that affect flights?

2024-09-14 06:02 Last Updated At:06:11

NEW YORK (AP) — A strike by some 33,000 Boeing machinists has halted production of the American aerospace giant's best-selling airplanes. The workers began picketing at Boeing factories and plants in Washington, Oregon and California on Friday after rejecting a contract offer their union negotiated and endorsed.

The work stoppage will not immediately impact commercial flights but could still bring significant losses for the company, which is headquartered in Arlington, Virginia, but has its roots in the Seattle area, where it makes most of its planes for airlines. Boeing is already dealing with a battered reputation and financial struggles that have piled up over recent years.

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Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

NEW YORK (AP) — A strike by some 33,000 Boeing machinists has halted production of the American aerospace giant's best-selling airplanes. The workers began picketing at Boeing factories and plants in Washington, Oregon and California on Friday after rejecting a contract offer their union negotiated and endorsed.

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing Machinists Union members from left, Brent Roberts, Ha Nguyen, Myles Simms and Rich Russell, wave to passing traffic while on the picket line at the Renton assembly plant, Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/John Froschauer)

Boeing Machinists Union members from left, Brent Roberts, Ha Nguyen, Myles Simms and Rich Russell, wave to passing traffic while on the picket line at the Renton assembly plant, Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/John Froschauer)

A sign sits just outside the property line for Boeing's Renton factory as a security guard stands behind a fence as Boeing workers picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/Lindsey Wasson)

A sign sits just outside the property line for Boeing's Renton factory as a security guard stands behind a fence as Boeing workers picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/Lindsey Wasson)

Signs and firewood sit in front of a Boeing sign as employees picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, outside the company's factory in Renton, Wash. (AP Photo/Lindsey Wasson)

Signs and firewood sit in front of a Boeing sign as employees picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, outside the company's factory in Renton, Wash. (AP Photo/Lindsey Wasson)

Here's what to know about the potential impact of the strike and what might happen next.

The strike won’t affect travelers unless it lasts a very long time.

The strike stops production of the 737 Max, Boeing’s best-selling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Renton and Everett, Washington, near Seattle. It will probably not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.

Airlines sometimes place orders for large numbers of planes, but when they do the deliveries are usually spread over several years. The strike therefore isn't likely to create a plane shortage at any particular airline. Some carriers might have to keep flying some of their older planes longer because the Boeing jets they bought to replace them will be delayed.

However, Boeing stands to lose a lot of cash, at least in the short term. Based on the length of past Boeing strikes — the last two were in 1995 and 2008 — TD Cowen aerospace analyst Cai von Rumohr says it's realistic to think the current walkout could last into mid-November, when workers’ $150 weekly payments from the union’s strike fund might seem low going into the holidays.

A strike that long would cost Boeing up to $3.5 billion in cash flow, as the company gets about 60% of the sale price when it delivers a plane to the buyer, von Rumohr added. The eight-week strike in 2008 cost the company about $100 million daily in deferred revenue.

They are skilled workers that Boeing can't readily replace.

“Boeing needs to keep making these (planes) because Boeing has been hemorrhaging money because of their safety problems,” said Art Wheaton, director of labor studies at Cornell University's School of Industrial and Labor Relations. “And safety problems are quite often caused by understaffing.”

Wheaton said the striking members of the International Association of Machinists and Aerospace Workers had legitimate concerns about the rejected contract, which would have raised pay 25% over four years, far below the union's initial demand for 40% over three years.

“They went 10 years without getting much of a raise at all — they are trying to make up for lost time,” Wheaton said. He pointed to the wider backdrop of inflation and rising costs of living. "There was a lot of bad blood” from other concessions workers had to make in their last agreement, he added.

The union initially wanted to restore traditional pensions that were eliminated a decade ago. The demand was a key sticking point in early contract negotiations, but the union instead settled for an increase in contributions to employee’s 401(k) retirement accounts and a pledge that Boeing would build its next new aircraft in Washington.

A.J. Jones, a quality inspector who has worked at Boeing for 10 years, said the raises and other terms of the proposed contract were insufficient.

“I’m glad that we passed a vote to strike because we are the leaders in the aerospace industry. And I think that we deserve better," Jones said Friday while blowing a whistle and hoisting a strike sign on a corner outside Boeing's Renton campus. "We’re fighting for decent pay because, you know, you got the Boeing heads who are making millions in bonuses. And we want fair pay.”

Boeing has said it's ready to get back to the bargaining table.

“The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members," the company said in a statement, adding that it was “committed to resetting our relationship with our employees and the union.”

Chief Financial Officer Brian West said Friday that CEO Kelly Ortberg, who became Boeing's chief executive only on Aug. 8, was already working on ways to address the objections of the union members.

Experts say it will come down to how much Boeing is willing to open its wallet. Bank of America analyst Ronald Epstein said Friday that Boeing will have to move closer to the union's initial proposal of 40% wage increases and possibly make other concessions.

Boeing has more at stake than just its finances. Wheaton said Boeing doesn't want another dent in its reputation.

Very little has gone right for Boeing this year, from a panel blowing out and leaving a gaping hole in one of its passenger jets during a January Alaska Airlines flight to NASA leaving two astronauts in space rather sending them home on a problem-plagued Boeing spacecraft.

The strike could also cause the company, which has lost more than $25 billion in the last six years, to fall farther behind European rival Airbus in orders and deliveries of new jetliners.

“They don’t really need to have this war (too), if they can avoid it," Wheaton said.

Koenig reported from Dallas. Manuel Valdes contributed from Renton, Washington.

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing 737 MAX airliners are pictured at the company's factory on Thursday, Sept. 12, 2024, in Renton, Wash. (AP Photo/Stephen Brashear)

Boeing Machinists Union members from left, Brent Roberts, Ha Nguyen, Myles Simms and Rich Russell, wave to passing traffic while on the picket line at the Renton assembly plant, Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/John Froschauer)

Boeing Machinists Union members from left, Brent Roberts, Ha Nguyen, Myles Simms and Rich Russell, wave to passing traffic while on the picket line at the Renton assembly plant, Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/John Froschauer)

A sign sits just outside the property line for Boeing's Renton factory as a security guard stands behind a fence as Boeing workers picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/Lindsey Wasson)

A sign sits just outside the property line for Boeing's Renton factory as a security guard stands behind a fence as Boeing workers picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, in Renton, Wash. (AP Photo/Lindsey Wasson)

Signs and firewood sit in front of a Boeing sign as employees picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, outside the company's factory in Renton, Wash. (AP Photo/Lindsey Wasson)

Signs and firewood sit in front of a Boeing sign as employees picket after union members voted overwhelmingly to reject a contract offer and go on strike Friday, Sept. 13, 2024, outside the company's factory in Renton, Wash. (AP Photo/Lindsey Wasson)

Taiwanese company Gold Apollo said Wednesday that it authorized its brand on the pagers that exploded in Lebanon and Syria but that another company based in Budapest manufactured them.

Hundreds of handheld pagers exploded almost simultaneously Tuesday across Lebanon and in parts of Syria, killing at least nine people, government and Hezbollah officials said. Officials pointed the finger at Israel in what appeared to be a sophisticated remote attack. The Israeli military declined to comment.

Hezbollah began striking Israel almost immediately after Hamas’ Oct. 7 attack that sparked the Israel-Hamas war. Since then, Israel and Hezbollah have exchanged fire daily, coming close to a full-blown war on several occasions and forcing tens of thousands on both sides of the border to evacuate their homes.

Gaza’s Health Ministry says more than 41,000 Palestinians have been killed in the territory since Hamas’ Oct. 7 attack. The ministry does not differentiate between fighters and civilians in its count but says a little over half of those killed were women and children. Israel says it has killed over 17,000 militants, without providing evidence.

Here's the latest:

JERUSALEM — The Israeli military says four soldiers were killed in southern Gaza and five others were wounded, with three of them in serious condition.

The deaths on Tuesday came nearly a year into the war in Gaza, which was triggered by Hamas’ Oct. 7 attack. The army did not describe the circumstances, but Israeli media reported that the soldiers were killed by a hidden bomb that exploded inside a building.

One of the four, Staff Sgt. Agam Naim, an army paramedic, was the first female soldier to have been killed in combat in Gaza, according to Israeli media.

Hamas and other armed groups remain active across the territory despite months of heavy Israeli bombardment and ground operations that have destroyed vast areas and displaced most of the population.

Israel says 346 of its soldiers have been killed since the start of ground operations last October. The military says it has killed over 17,000 militants, without providing evidence.

TAIPEI, Taiwan — Taiwanese company Gold Apollo said Wednesday that it authorized its brand on the pagers that exploded in Lebanon and Syria but that another company based in Budapest manufactured them.

Pagers used by hundreds of members of the militant group Hezbollah exploded near-simultaneously Tuesday in Lebanon and Syria, killing at least nine people, including an 8-year-old girl, and wounding more than 2,000. Hezbollah and the Lebanese government blamed Israel for what appeared to be a sophisticated remote attack.

The AR-924 pagers used by the militants were manufactured by BAC Consulting KFT, based in Hungary’s capital, according to a statement released Wednesday by Gold Apollo.

“According to the cooperation agreement, we authorize BAC to use our brand trademark for product sales in designated regions, but the design and manufacturing of the products are solely the responsibility of BAC,” the statement read.

Gold Apollo chair Hsu Ching-kuang told journalists Wednesday that his company has had a licensing agreement with BAC for the past three years, but did not provide evidence of the contract.

The AR-924 pager, advertised as being “rugged,” contains a rechargeable lithium battery, according to specifications once advertised on Gold Apollo’s website before it was apparently taken down Tuesday after the sabotage attack. It could receive text messages of up to 100 characters and claimed to have up to 85 days of battery life. That’s something that would be crucial in Lebanon, where electricity outages have been common as the tiny nation on the Mediterranean Sea has faced years of economic collapse. Pagers also run on a different wireless network than mobile phones, making them more resilient in emergencies — one of the reasons why many hospitals worldwide still rely on them.

FILE - Israeli soldiers move next to destroyed buildings following Israeli strikes during a ground operation in the Gaza Strip, Sept. 13, 2024. (AP Photo/Leo Correa, File)

FILE - Israeli soldiers move next to destroyed buildings following Israeli strikes during a ground operation in the Gaza Strip, Sept. 13, 2024. (AP Photo/Leo Correa, File)

Civil Defense first-responders carry a man who was wounded after his handheld pager exploded, in the southern port city of Sidon, Lebanon, Tuesday, Sept. 17, 2024.(AP Photo)

Civil Defense first-responders carry a man who was wounded after his handheld pager exploded, in the southern port city of Sidon, Lebanon, Tuesday, Sept. 17, 2024.(AP Photo)

People gather outside the American University hospital after the arrival of several people who were wounded by exploding handheld pagers, in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

People gather outside the American University hospital after the arrival of several people who were wounded by exploding handheld pagers, in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

Palestinians in Lebanon wave their national flags during a protest in front of the United Nations Relief and Works Agency (UNRWA) headquarters in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Bilal Hussein)

Palestinians in Lebanon wave their national flags during a protest in front of the United Nations Relief and Works Agency (UNRWA) headquarters in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Bilal Hussein)

People gather around an ambulance carrying wounded people whose handheld pager exploded, at the emergency entrance of the American University hospital in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

People gather around an ambulance carrying wounded people whose handheld pager exploded, at the emergency entrance of the American University hospital in Beirut, Lebanon, Tuesday, Sept. 17, 2024. (AP Photo/Hassan Ammar)

The supermoon rises behind the houses in Mas'ade, a village in the Israeli-annexed Golan Heights, Tuesday, Sept. 17, 2024. (AP Photo/Leo Correa)

The supermoon rises behind the houses in Mas'ade, a village in the Israeli-annexed Golan Heights, Tuesday, Sept. 17, 2024. (AP Photo/Leo Correa)

A Lebanese Red Cross volunteer collects blood donations for those who were injured by their exploded handheld pagers, Tuesday, Sept. 17, 2024, at a Red Cross center in the southern port city of Sidon, Lebanon. (AP Photo/Mohammed Zaatari)

A Lebanese Red Cross volunteer collects blood donations for those who were injured by their exploded handheld pagers, Tuesday, Sept. 17, 2024, at a Red Cross center in the southern port city of Sidon, Lebanon. (AP Photo/Mohammed Zaatari)

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