TLDR
- Around 3,200 Boeing defense workers in Missouri and Illinois went on strike Monday after rejecting a modified four-year labor contract
- This marks the first strike at Boeing’s defense facilities in almost 30 years, with the last one occurring in 1996 and lasting 99 days
- Workers rejected a deal offering 20% wage increases and boosted retirement contributions, with average wages set to rise from $75,000 to $102,600
- Boeing stock dipped only 0.5% in premarket trading, suggesting minimal market impact compared to previous commercial aviation strikes
- The striking workers build F-15 fighter jets, T-7 training aircraft, missiles, munitions, and components for Boeing’s 777X commercial planes
Boeing defense workers walked off the job at midnight Monday in the first strike at the company’s St. Louis-area facilities in nearly three decades. The work stoppage affects approximately 3,200 International Association of Machinists union members across Missouri and Illinois locations.
The strike comes after workers voted Sunday to reject Boeing’s modified contract proposal. The deal would have increased average wages from $75,000 to $102,600, representing a 20% boost, while also enhancing retirement contributions.
Boeing stock showed minimal reaction to the news, dropping just 0.5% to $220.87 in premarket trading Monday. This muted response contrasts sharply with the market impact of Boeing’s commercial aviation strikes in late 2024.
The last defense worker strike at these facilities occurred in 1996 and lasted 99 days. Union officials said the current action reflects workers’ frustration with contract terms that don’t match their contributions to national defense programs.
Financial Impact Remains Limited
Boeing’s defense and space division generates nearly one-third of the company’s total revenue. However, CEO Kelly Ortberg downplayed the potential financial impact during the company’s July 29 earnings call.
“The order of magnitude of this is much, much less than what we saw last fall,” Ortberg said. He noted the St. Louis union represents about one-tenth the size of the Seattle-based union that struck in 2024.
Boeing has implemented contingency plans to keep non-striking workers operational. The company says it’s prepared to maintain customer support during the work stoppage.
The striking workers produce critical defense equipment including F-15 fighter aircraft and T-7 training jets. They also manufacture missiles, munitions, and components for Boeing’s commercial 777X aircraft program.
In March, Boeing secured a major victory by winning the contract for America’s next-generation stealth fighter jet. The company beat rival Lockheed Martin for the multibillion-dollar F-47 program.
Defense Division Shows Recent Strength
Boeing’s defense business reported profits for two consecutive quarters, marking a turnaround from previous struggles. The division avoided the charges that previously plagued its financial performance.
The company also improved results on fixed-price development programs that had caused significant cost overruns in the past. This progress came as Boeing worked to stabilize operations across all business segments.
Boeing had sweetened its latest contract offer after workers rejected an initial proposal last week. The company eliminated a controversial scheduling change and revised 401(k) terms to provide full contribution increases upfront rather than spread over three years.
The aerospace industry has seen increased union activism recently. Skilled mechanic shortages have given workers more leverage in contract negotiations.
Pratt & Whitney faced a three-week strike earlier this year that contributed to engine shortages at Airbus. Boeing’s commercial factories were shut down for two months in late 2024 due to striking workers.
Boeing warned it would withdraw a $5,000 signing bonus and wouldn’t offer it again if workers didn’t ratify the Sunday contract vote. Workers ultimately chose to reject the deal and proceed with strike action.
Tom Boelling, the union’s top official, said members deserve a contract reflecting their skills and defense work importance. The union posted on social media that the strike began “because enough is enough.”
Boeing vice president Dan Gillian confirmed the company’s readiness for the work stoppage and said contingency plans were fully implemented.
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