Striking Boeing workers reject 35% pay rise offer

Striking Boeing workers have voted to reject a new offer from the aviation giant, which included a 35% pay rise over four years.

The International Association of Machinists (IAM) union said 64% of its striking members voted against the proposed deal.

More than 30,000 of Boeing’s workers have joined the walkout, which started on 13 September, after the union after an initial offer was rejected.

It comes just hours after Boeing boss Kelly Ortberg warned the company is at a “crossroads” as losses at the firm surged to roughly $6bn (£4.6bn).

“After 10 years of sacrifices, we still have ground to make up, and we’re hopeful to do so by resuming negotiations promptly,” union representatives said in a statement.

“This is workplace democracy – and also clear evidence that there are consequences when a company mistreats its workers year after year,” it added.

It is the second time that the striking workers have rejected a proposed deal in a formal vote. The previous offer was turned down last month by 95% of workers.

Earlier, Mr Ortberg, who took over as chief executive in August, said he had been working “feverishly” to stabilise the firm, as it worked to repair its reputation, which has been hit by manufacturing and safety concerns.

“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” he said.

The latest crisis at Boeing erupted in January when a dramatic mid-air blowout of a piece of one of its passenger planes.

Its space business also suffered a reputational hit after its Starliner vessel was forced to return to Earth without carrying astronauts.

The strike has compounded the problems, leading to a dramatic slowdown in production.

Mr Ortberg said the firm was “saddled with too much debt” and had disappointed customers with lapses in performance across the business.

Boeing’s commercial aircraft business reported operating losses of $4bn in the last three months, while its defence unit lost nearly $2.4bn.

“They clearly a have a lot to recover from, both operationally and financially,” said Ben Toscanos of S&P Ratings. “The first step will be to resolve the strike… so we’ll see how that plays out.”

Mr Ortberg argued the firm was in a strong position, with a backlog of roughly 5,400 orders for its planes.

But he warned investors that restarting the firm’s factories, whenever the strike does end, will be tricky.

“It’s much harder to turn this on than it is to turn it off. So it’s critical, absolutely critical, that we do this right,” he said.

“We have a detailed return-to-work plan in place and I’m really looking forward to getting everybody back and getting to work on that plan.”

The company announced plans earlier this month to cut roughly 10% of its workforce. Thousands of other staff are already on a rolling furlough due to the strike, which has also hit suppliers.

Mr Ortberg told investors that his first priority was a “fundamental culture change”.

“We need to prevent the festering of issues and work better together to identify, fix and understand root cause,” he said.