Acting US labour secretary encourages Boeing and workers to reach 'fair contract'

US Labour Secretary Julie Su on Wednesday encouraged Boeing and more than 30,000 of the planemaker’s factory workers to bridge a divide in negotiations and reach a fair contract, as a vote on a new deal looms on Sept. 12.

Boeing’s Seattle-area workers, who produce its strongest-selling 737 commercial jet and other planes, vote next week on their first full new contract in 16 years, with the two sides still tackling demands such as job security.

The workers can strike as early as Sept. 13 if they reject the contract and overwhelmingly support a work stoppage.

The US planemaker has been seeking to restore 737 MAX production to a rate of 38 per month after a January mid-air panel blowout on a new plane led Boeing to slow output of the jet.

“We fully support collective bargaining,” Su told Reuters on the sidelines of a New York convention held by the International Association of Machinists and Aerospace Workers (IAM), which represents the Boeing workers. “I would just continue to encourage the parties to bargain, like they’re not quite there, and that reaching a fair contract is a good thing."

“It’s the way to allow everyone to then march forward together to accomplish the mission of the company in a way that prioritizes the workers,” she added.

The largest percentage of Boeing's global workforce, or more than 66,000 employees, live and work in Washington state on the MAX, 767 and 777 widebody jets, along with other planes.

The IAM wants the planemaker to provide guarantees that its next airplane program will stay in Washington state's Puget Sound area. The timing of a new Boeing plane, however, is unclear.

The issue is "definitely an obstacle to getting an agreement," said Jody Bennett, the IAM's general vice president, in an interview.

"They always have engineers working on upcoming programs," he added. "All we're asking for is the next program."

The IAM has also asked for better retirement benefits, a seat on Boeing's board and wage increases exceeding 40% over three to four years after what it termed years of stagnant earnings.

US unions have capitalized on tight labor markets to win hefty contracts at the bargaining table, with mainline pilots, autoworkers and others scoring big raises in 2023.

"We remain confident we can reach a deal that balances the needs of our employees and the business realities we face as a company," Boeing said in a statement on Wednesday.