By George Landrith, Frontiers of Freedom
Boeing has had a whirlwind year, and its next major challenge may be right around the corner.
In addition to months spent upgrading safety and quality procedures and onboarding a new CEO, the aerospace giant has spent much of the past year at the negotiation table with the International Association of Machinists and Aerospace Workers (IAM). Boeing and the IAM are negotiating a new collective bargaining agreement covering more than 32,000 Boeing employees in Washington, Oregon, and California.
The best outcome for employees, the company, and the United States is an agreement that meets workers’ needs, maintains Boeing’s competitiveness, and avoids the disastrous consequences of a strike.
This issue is coming to a head this week, as the union’s existing contract expires just before midnight on September 12. Without a resolution to negotiations, IAM could strike, halting production across many of Boeing’s most important manufacturing sites.
The U.S., however, cannot afford a Boeing strike or work stoppage. Boeing is too important to the U.S. economy and national defense for production to stop unnecessarily for even a day.
One of the country’s largest exporters, Boeing employs 145,000 people across the U.S., indirectly supports over a million jobs, and boasts an economic impact of close to $70 billion. Put simply, Boeing’s impact on the U.S. economy is too significant to be put on hold.
In 2008, IAM hit Boeing with a 58-day strike, during which Boeing lost an estimated $100 million a day and striking workers missed out on an average of $7,000 in pay. Suppliers across the country also reported losses and slowed production. The truth is, given Boeing’s current financial difficulties (the company lost $2.2 billion in 2023), it simply cannot afford a work stoppage. The IAM is seeking a 40% wage increase, as United Automobile Workers did last year. Even though the automakers made record profits in the years leading up to the negotiations, they agreed on a 25% wage increase, arguing that workers’ demands would significantly raise costs and auto prices. It is hard to see how Boeing, in a far more difficult financial situation, could afford such an increase – let alone a strike.
As our nation’s leading aerospace company, it is within every American’s best interest for Boeing to succeed and grow – especially given tough international competition. U.S. aerospace needs to stay on top, and Boeing leads the industry.
Speaking of international competition – it is important to note that the Boeing workers at the center of this negotiation not only build commercial aircraft, but also key defense products. Given rising international conflicts, it is of utmost importance that the U.S. defense industrial base remains strong and continues producing platforms for the warfighter at full capacity.
In Washington, Boeing builds the KC-46 aerial refueling tanker, P-8 anti-submarine warfare aircraft, and the E-7 airborne early warning and control aircraft, all of which are built on commercial aircraft platforms (the 767 and 737). These systems are vital to the U.S. military, and to our allies’ militaries. Without the KC-46, U.S. warplanes would have reduced capacity and range. Without the P-8, the U.S. Navy would lose a key reconnaissance asset. And without the E-7, the U.S. Air Force would miss out on a crucial next-generation command and control platform that will allow it to counter evolving threats.
A strike of Boeing machinists could also lead to higher travel costs for consumers. Commercial airplane production already trails demand, with both Boeing and Airbus setting all-time backlog records earlier this year. A halt in Boeing’s production at a time of growing consumer appetite for air travel will force airlines to raise ticket prices while waiting even longer to expand their fleets. As travel rebounds to pre-pandemic levels, it is vital that airplane production keeps up with demand.
The U.S. needs Boeing to succeed in order to retain its position as the world’s aerospace powerhouse. An IAM strike will benefit foreign companies seeking to overtake U.S. manufacturing power. American workers, the supply chain, and U.S. competitiveness will suffer. It is also vital to the U.S. – and the world – that the company’s operations continue full speed ahead. Employees should embrace the fact that reaching a deal is the best outcome for them, Boeing, and the U.S. economy.
George Landrith has served as the President of the Frontiers of Freedom Institute since 1999. He is an adjunct professor at the George Mason School of Law.