The recent seven-week strike at Boeing, which ended only last week, is far from the end of the aerospace giant’s troubles. More than 33,000 factory workers in the U.S. Northwest are returning to work after narrowly voting to accept Boeing’s third contract offer. The strike disrupted production and exposed deep-seated issues in the company, marking a challenging beginning for new CEO Kelly Ortberg, who has only been in the role for three months. Ortberg now faces the daunting task of healing a divided workforce, restoring production, and steering Boeing’s uncertain future.
The labor dispute brought to light rifts not only between Boeing’s management and the union but also internal divisions among union members, resentment from white-collar staff, and a widespread feeling of discontent. Ortberg’s leadership is now under scrutiny as he works to rebuild morale, strengthen Boeing’s supply chain, and stabilize production after the turmoil of recent years.
Boeing’s strike, which began with a large contingent of workers protesting against stagnant wages and rising executive bonuses, came at a precarious time for the company. Ortberg stepped into his role in August, inheriting a firm already struggling with quality control issues, supply chain bottlenecks, and a series of public safety crises related to its 737 MAX and other models. The strike marked the abrupt end of Ortberg’s honeymoon period, forcing him to confront the growing unrest within the workforce.
Interviews with Boeing insiders reveal that Ortberg’s negotiating tactics, largely carried over from his predecessor, did not sit well with the union or its members. Boeing’s initial two contract offers were rejected, with the union finally agreeing to the third after some concessions. The latest contract promises a 38% wage increase over four years and a ratification bonus of $12,000, but the close vote margin suggests significant dissatisfaction remains.
The slim majority that voted in favor of Boeing’s final offer belies a broader rift within the workforce. Boeing’s management appeared unprepared for the scale of anger and frustration among employees, whose wages have struggled to keep pace with inflation even as the company allocated billions for share buybacks and executive bonuses. Workers felt sidelined as the company prioritized shareholder value, exacerbating feelings of inequality between rank-and-file employees and Boeing’s executives.
“Machinists have been with the company for years and feel betrayed by the decisions made by the higher-ups,” said Bill George, former Medtronic CEO and executive fellow at Harvard Business School. “The number one issue right now is the disconnection between Boeing’s management and its workers.”
Despite early praise for moving to Seattle and expressing commitment to Boeing’s production workforce, Ortberg’s personal involvement in the negotiations came only late in the process. His absence for much of the strike left employees feeling abandoned, while union leaders grappled with mounting frustration among members.
The handling of negotiations has also strained trust within the union itself. Initially, union leaders had refrained from blaming Ortberg directly, recognizing the challenges he inherited from former CEO Dave Calhoun. However, by the third round of negotiations, frustration was palpable among workers, many of whom felt pressured into accepting the latest offer out of fear of worsening terms if they held out any longer.
“He’s no different from the last CEO and the one before,” said Cory Thompson, a 47-year-old paint-quality inspector in Boeing’s Everett factory, echoing the sentiment of many who felt disappointed by Ortberg’s lack of engagement during the talks.
Brandon Bryant, president of IAM District W24, observed that while Ortberg’s eventual presence helped push negotiations over the line, his initial approach of pushing the union to vote again on a previously rejected offer came across as heavy-handed. The final agreement was reached only after Boeing agreed to increase wage hikes and bonuses. But to some union members, the whole process left a sour taste.
With the strike behind them, Boeing must now attempt to reunify its divided workforce. However, the hard line taken by IAM members during the strike, coupled with the contract they ultimately secured, may have unintended repercussions. According to insiders, non-union employees and other production staff could seek similar benefits, potentially sparking new rounds of labor challenges. Boeing’s existing workforce divisions may widen, especially as the company proceeds with layoffs planned as part of its restructuring efforts.
For many non-union employees, the IAM’s assertive tactics have been a point of contention. Some expressed frustration, feeling that the union’s demands risked pushing Boeing towards a financial crisis that could affect everyone.
“Do they want to sabotage the company’s future?” asked one non-union Boeing employee, alluding to the high stakes involved in the labor negotiations. “Are they pushing Boeing into bankruptcy?”
Boeing’s financial health has been a topic of concern for some time. The company recently raised $24 billion to stabilize its operations but still faces a significant challenge in generating enough revenue to support the development of new aircraft and address outstanding debts. A primary focus for Boeing is the eventual successor to the 737 MAX, the company’s best-selling jet. Yet, experts say Boeing’s ability to fund this project is hampered by years of crisis and safety issues that have drained its resources.
Nick Cunningham, an analyst at investment research firm Agency Partners, believes that the company’s focus on short-term survival could hinder its capacity to raise funds for future projects. “Boeing’s medium-term challenge is financing a new jet. But right now, the immediate goal is making factories operate more effectively and safely.”
In addition to its internal strife, Boeing is also battling disruptions in its supply chain, exacerbated by the strike and ongoing layoffs in supplier firms. Many suppliers furloughed or laid off staff during the strike, leaving Boeing’s production schedule in a state of uncertainty. Restarting 737 MAX production, which is crucial to Boeing’s financial recovery, will likely be a slow and challenging process. As suppliers scramble to resume full operations, Boeing will have to carefully navigate potential delays that could affect delivery timelines and further strain relationships with customers.
In the eyes of many employees and industry analysts, Ortberg’s response to these challenges could define his tenure at Boeing. While he inherited a troubled legacy from his predecessors, Ortberg’s leadership will be evaluated based on his ability to unify Boeing’s fractured workforce and steer the company towards a more stable future. The company’s delicate relationship with the union and its rank-and-file workforce remains an ongoing challenge, one that may require a more collaborative and transparent approach to repair.
Bartley Stokes Jr., a 40-year-old Boeing mechanic, described the task ahead for Ortberg as formidable. “I’m worried they don’t have a good plan,” he said, expressing concerns shared by many on Boeing’s factory floors.
As Boeing moves into the post-strike phase, the company’s leadership has indicated a commitment to measured progress. Ortberg and his team are keenly aware of the need to avoid any additional missteps that could shake the confidence of stakeholders, including employees, investors, and regulators. The delicate balance between revamping production and ensuring the quality and safety of Boeing’s aircraft will be crucial as the company works to regain trust.
Rebuilding Boeing’s reputation and credibility with both its workforce and the broader market will take time and careful leadership. As production ramps up, employees hope that Boeing’s leaders will listen more closely to the needs and concerns of those on the assembly lines.
Ortberg’s memo to staff following the resolution of the strike expressed a commitment to “listening and working together.” The question now is whether this promise will translate into meaningful action that addresses the issues exposed by the strike.
