In an exclusive interview, Jon Holden, president of IAM District 751, said he understood the angry response from members still seething over a 2014 deal that hiked health care costs and stripped away pensions. He defended the sprawling agreement unveiled Sunday as the best his team could obtain during the final frenzied days of negotiations that included a brief appearance by Boeing’s new Chief Executive Officer, Kelly Ortberg.

“We got as much as we could in collective bargaining, short of a strike,” Holden said. “But rightfully so, members are angry. It’s now in their hands, as it is supposed to be.”

While investors welcomed the preliminary deal — sending Boeing shares up 3.4% in New York on Monday — it’s far from certain that the 33,000-member union will accept the offer. Maintaining labor peace and averting a lengthy strike is crucial to Boeing’s effort to repair its battered balance sheet and improve the quality of work in its factories after years of turmoil. 

The 25% pay boost over four years offered by Boeing is less than the union’s initial 40% demand. However, it stacks up well against other recent labor deals. The company is offering an immediate 11% pay raise that would mean the highest-paid workers make $57.43 an hour. For some labor grades, minimum wages will increase as much as 42.3% when cost-of-living adjustments are included.

The United Auto Workers ended a lengthy strike last year after reaching a deal for a 25% hourly pay raise over a more-than-four-year contract. At Stellantis NV, the top hourly wage will exceed $42 an hour by 2028. At Spirit AeroSystems Holdings Inc., workers got a 23.5% pay boost over four years.

Boeing’s offer also eliminates a controversial bonus for IAM members that was tied to internal measures for productivity, quality and safety. Workers are furious at the change, even though they were frustrated at times with the formula that could be skewed by supplier miscues.

Holden acknowledged that his team had focused on guaranteed wages since members considered it a top priority in meetings over the past two years. “I do understand the frustration in not having annual bonuses,” he added.

Strike Preparations

Members of the International Association of Machinists and Aerospace Workers will vote Thursday on whether to accept the deal, and whether to strike. If Boeing’s offer is rejected and two-thirds support the work stoppage, then employees will walk off the job at 12:01 a.m. on Friday.

“Because they haven’t had a contract negotiation since 2008, the expectations would be high,” said Leon Grunberg, a long-time observer of Boeing labor relations and professor emeritus of sociology at the University of Puget Sound. “But Boeing’s in such a vulnerable place right now that this is probably as generous as they could be.”

From northern California to Idaho, strike preparations are under way, with IAM members making signs along with “burn barrels” to warm picket lines. In online forums, hundreds of employees vented their rage, often in harsh terms, at a deal they say doesn’t do enough to improve their financial standing. 

Leaflets distributed around Boeing’s Everett factory on Monday urged workers to reject “Boeing’s Bad Deal” and to approve authorizing a strike when they vote on Thursday. It demanded the union fight for a 40% wage increase, board seat and pensions.

“Stand strong,” said a handout viewed by Bloomberg. “We deserve a fair deal.”

Holden acknowledged the union got a lot, but not all that it had sought in bargaining the first comprehensive deal in 16 years. But he said he ultimately decided to recommend that members accept Boeing’s offer because he can’t guarantee that a strike would produce a better deal.

“It’s irresponsible to ask people to strike for something I’m unsure we can accomplish,” Holden said. “You have to think of the weight of 33,000 families.”

Ortberg’s Role

Ortberg, who took over as Boeing CEO in early August, has vowed to return focus to the planemaker’s manufacturing roots, after a midair blowout on one of its jets early this year threw a spotlight on its manufacturing and safety record. The new chief had largely stayed out of the contract talks, which kicked off in early March and intensified over the past month when the two sides were holed up in a Seattle hotel.

But he came in for a short meeting on Saturday, weighing in on “job security,” a contentious issue with union leaders pressing Boeing to commit to building its next new plane in the Puget Sound region.

“He did give a commitment on job security,” Holden said. “Then we have work to do to make it worth something.”

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The government is warning of a “grim” September with up to 6,000 jobs set to be cut across the steel and oil refining industries, the BBC understands.

A total of 2,800 jobs are set to go at Port Talbot in Wales, while up to 3,000 jobs are expected to be axed at British Steel in Scunthorpe. A further 400 will be cut at Scotland’s Grangemouth oil refinery.

Unions’ hopes that investment from a new Labour government could help limit job losses have largely been dashed, according to sources.

The government said it was facing “tough decisions” but added: “The solution isn’t writing a blank cheque to bail out the past, or to put taxpayers on the hook for the industrial challenges we’ve inherited.”

Labour’s manifesto promised a kitty of £2.5bn to revitalise the UK steel industry.

But the new government has taken a similar line to its predecessor by insisting that public money is only available to invest in new greener steel production facilities, rather than to subsidise large ongoing losses at carbon-intensive plants.

Both Tata, the Indian firm which owns Port Talbot and Jingye of China, which owns Scunthorpe, insist the plants are losing £1m a day.

The government is in talks to finalise a grant to Tata of £500m towards the £1.25bn cost of building an electric arc furnace which will eventually replace the last remaining blast furnace at Port Talbot.

Blast furnaces use coke in the process of creating “virgin” steel but the process generates carbon dioxide while electric arc furnaces are mostly used to melt down and repurpose scrap steel.

This process cannot replicate all grades of steel that are produced in blast furnaces, including some types used in construction and rail.

At Port Talbot, the GMB and Community unions have presented members with a redundancy deal struck with Tata which would see workers receive 2.8 weeks of earnings for every year of service up to a maximum of 25 years.

Workers can also sign up to a one-year skills and re-training scheme during which they will be paid £27,000.

Union officials hope the number of immediate compulsory redundancies at the UK’s biggest steel works will end up being far lower than 2,800 as many workers who left recently have not been replaced. There have been more than 2,000 expressions of interest in the redundancy and re-training package being offered.

In Scunthorpe, prospects for workers have deteriorated more suddenly.

Unions had hoped that a government support package of up to £600m to Jingye would see one of its remaining blast furnaces remain open during the three years it took to build a new electric arc furnace.

That prospect has faded, according to union and government sources, meaning that up to 3,000 jobs could go.

Asked how the government felt about the next few weeks, a senior source said: “It’s going to feel grim.”

Unions have told the BBC that the closure of blast furnaces at both Port Talbot and Scunthorpe would leave the UK without the ability to make virgin steel.

But other industry voices have downplayed such vulnerabilities, pointing out that the coking coal and iron ore used in blast furnaces are imported from abroad, so importing some virgin steel would make little difference.

Meanwhile, an announcement is expected this month to confirm that Scotland’s only remaining oil refinery at Grangemouth will shut down early next year to become a less labour-intensive oil and gas import terminal.

Government promises to explore a sustainable future for the site based on the planned expansion of renewable energy in Scotland are not expected to come soon enough to save up to 400 jobs.

A government spokesman said: “Decarbonisation does not mean deindustrialisation and government will continue working in partnership with trade unions and business to support good, stable jobs and deliver economic growth.”

A spokesperson for British Steel in Scunthorpe said bosses were in “ongoing discussions” with the government over its future operations.

“While progress continues, no final decisions have been made,” they added.