Ending the Boeing strike won't be easy. Here's why.

When thousands of Boeing employees rejected a new labor deal, launching a strike that began Friday, they were at odds not only with management but also with their union leaders, who supported the proposed deal.

Now, any attempt to reach an agreement must take into account the demands of the ranks of the International Association of Machinists and Aerospace Workers. What they want — significantly larger pay raises and far more lucrative retirement benefits than their leaders and Boeing agreed to — may be too much to handle. But labor experts say the strength of the strike vote — 96 percent in favor — will help the union get a better deal.

“These overwhelming numbers are kind of embarrassing, certainly from a union public relations standpoint,” said Jack Rosenfeld, a sociologist who studies labor at Washington University in St. Louis. “But they also present the union with leverage when it resumes negotiations.”

And Boeing is in a tough spot after a slowdown in commercial jet production — required by regulators after a panel blew off a passenger jet fuselage in January — led to big financial losses. A prolonged strike at Boeing's main manufacturing plant in the Seattle area would add significantly to losses and likely push its credit rating into junk territory, a chilling development for a company with nearly $60 billion in debt.

The Federal Mediation Service said Friday that the union and Boeing management will resume negotiations in the coming days.

“We're going back to the bargaining table, and we're going to bargain for what our members deserve,” John Holden, president of District 751, part of the machinists union that represents most of the workers on strike, said in an interview. Give what they thought they would go for.”

Asked whether union leadership was outside the rank and file, Mr Holden said the vote on the contract allowed members to be heard. “You should never forget that the real power is in your membership“ He said

Brian West, Boeing's chief financial officer, speaking at an investor conference on Friday, said the strike would “threaten our recovery,” but added that management was willing to talk to try to get a deal done. “We want to go back to the table and we want to reach an agreement that's good for our people, their families, our communities,” he said.

When asked to comment for this article, Boeing referred to Mr. West's comments.

Reaching an agreement will not be easy. Wages are a primary factor.

Mid-ranking workers represented by the machinists union currently earn a minimum of $20 an hour, which is in line with Amazon delivery drivers, who do not belong to a union. And although $20 an hour is 25 percent higher than the $16 an hour contract began in 2008, inflation has since risen to 44 percent.

“The cost of living in the Seattle area is very high,” said Andrew Hayden, associate director of the University of Washington's Harry Bridge Center for Labor Studies. “There are all these pressures that the company has not met.”

Boeing said it offered an average wage increase of 25 percent for all jobs covered by the contract, with larger increases going to lower-wage workers. Employees who have been with the company for six years or more earn significantly more than the minimum rate. The 5,000 mechanics who perform final inspections of aircraft parts and systems were paid an annual wage of $130,000 at the end of the four-year contract, up from $102,000, Boeing said.

And the company offered to carry higher wage rates when workers changed jobs within the company. The machinists union said the current system discouraged workers from seeking other jobs at Boeing to advance their careers.

Despite such offers, the rank and file wanted more, specifically a 40 percent wage increase. “We're firm on it,” said Phet Bouapha, a mechanic who has been at Boeing for nine years and a union shop steward.

Retirement pay is also a key issue. A decade ago, Boeing stopped offering a type of pension that provides predictable payouts during retirement. “It's a wound that will never heal,” said Mr Holden, the union leader.

Union members want the pension returned to a new contract and say management's additional 401(k) contributions are not enough. “It's important for people to have long-term security,” Mr Boafa said.

Boeing's last strike, in 2008, lasted about two months, a long time without paychecks for striking workers. Strike pay from the union is only $250 a week, beginning in the third week. Ruben Tishchuk, a mechanic who has been at Boeing for six years, said he has enough savings to see him through at least two weeks of the strike.

“My kid wants to be like his dad and build airplanes, but what will his future be like if they're away from our facilities?” “It's beyond me — I'm fighting for the future of my children and grandchildren,” Mr Tishchuk said.

Asked whether his members could endure a longer strike for little income, Mr. Holden, the union leader, said, “The battle of time will play out here.”

The strike comes at a critical time for Boeing's finances and its reputation with customers and the public. The company suffered losses from fatal crashes of its 737 Max planes in 2018 and 2019. The pandemic, which caused severe declines in global air travel and supply chain snarls, walloped Boeing's business. And a fuselage panel flew off a plane during a flight this year. Its defense business is unbalanced due to losses on fixed-price contracts.

Boeing's leaders had hoped that production of commercial jets would increase, enabling it to reverse a cash drain from its operations. In the first half of this year, the company had more than $7 billion in cash outflows from operations. A strike on its own could result in a cash flow of more than $1 billion a month, Wall Street firm Jefferies said in a research note Friday.

Mr. West, the Boeing executive, said Friday that the company would be “laser-focused on actions to conserve cash.” Moody's Investors Service said on Friday it was considering whether to downgrade Boeing's credit rating to non-investment grade – “junk” territory.

But labor experts say Boeing isn't so financially strapped that it can't afford to improve its offer. For all its problems, Boeing has an effective duopoly, with European aerospace consortium Airbus, in making commercial aircraft and an order book that will bring in significant revenue. The company said in a recent securities filing that its order backlog at the end of June was $516 billion, and that it expected about a quarter of that to convert to revenue next year and more than two-thirds by the end of 2028.

“They're strong over the long term and in very tight market positions,” said Harry Katz, a professor at Cornell University's School of Industrial and Labor Relations. “They're not like a clothing manufacturer with a whole range of competitors.”

julie weed Contribution reporting and Alain Delacurier Contribute research.