Boeing faces strike threat in St. Louis as union rejects contract offer

Boeing (NYSE:BA) is at risk of a work stoppage at its St. Louis-area defense facilities after union members overwhelmingly rejected a proposed labor contract that included a 20% wage increase over four years.

The vote, held Sunday by the International Association of Machinists and Aerospace Workers (IAM) Local 837, signals growing dissatisfaction among the 3,200 defense workers the union represents across Missouri and Illinois.

In a statement, the union said Boeing’s (NYSE:BA) offer failed to adequately reflect workers’ priorities and the value of their contributions.

While the current agreement expires at 11:59 p.m. CT this coming Sunday, both sides now enter a seven-day “cooling-off” period. Unless Boeing improves its offer and gains union approval during that window, employees could strike, halting production at one of the company’s key military aircraft hubs.

A strike would impact assembly of the F-15 and F/A-18 fighter jets, the T-7A trainer and the MQ-25 drone refueling aircraft, among other programs, posing serious challenges for Boeing’s (BA) defense unit, which has struggled financially and hasn’t posted an annual profit since 2022.

The threat of labor unrest follows last year’s two-month strike by a separate machinists union in Seattle, which disrupted Boeing’s (BA) commercial jet production and prompted the company to raise $24 billion through an equity offering to offset the financial toll.

Boeing (BA) has not yet commented on the rejected offer. The outcome of the St. Louis standoff is expected to draw attention from analysts when the company reports its quarterly earnings on Tuesday. It also sets the stage for upcoming labor negotiations at GE Aerospace (GE), where another IAM local begins contract talks this week.

IAM Local 837 has a relatively quiet strike history, last walking out in 1996. However, recent tensions echo broader frustrations among Boeing’s (BA) union workforce, particularly in the wake of long-term contracts that curbed pensions and limited wage growth during a period of rising inflation.