Boeing factory workers strike for first time since 2008

Boeing‘s factory workers walked off the job after midnight on Friday, halting production of the company’s bestselling airplanes after staff overwhelmingly rejected a new labor contract.

It’s a costly development for the manufacturer, which has struggled to ramp up production and restore its reputation following safety crises.

Workers in the Seattle area and in Oregon voted 94.6% against a tentative agreement that Boeing and the International Association of Machinists and Aerospace Workers unveiled Sunday. The workers voted 96% in favor of a strike, far more than the two-thirds vote required for a work stoppage.

“We strike at midnight,” said IAM District 751 President Jon Holden at a news conference where he announced the vote’s results to cheers from machinists. He characterized it as an “unfair labor practice strike,” alleging that factory workers had experienced “discriminatory conduct, coercive questioning, unlawful surveillance and we had unlawful promise of benefits.”

He said Boeing needs to bargain in good faith. Boeing didn’t comment on his claims.

Boeing’s CFO Brian West told an investor conference on Friday that the company’s leaders were disappointed with the rejection and strike. But he said they want to get back to the table to negotiate a new deal “that’s good for our people, their families, our community and our intent is to do just that.”

“There was a disconnect,” West said at the Morgan Stanley event, warning that the strike would impact airplane deliveries and production. He declined to provide specific financial impact estimates, saying the effect of the strike would be determined by how long it lasts.

“Our immediate focus is to the laser-like focus on actions to conserve cash, and we will,” he added

Credit-ratings agencies Moody’s and Fitch warned Boeing that a lengthy strike put it in danger of downgrades, sending shares of the company down nearly 4% on Friday.

The tentative proposal included 25% wage increases over four years and other improvements to health-care and retirement benefits, though the union had sought raises of about 40%. Workers had complained about the agreement, saying it didn’t cover the increased cost of living.

The vote is a blow to CEO Kelly Ortberg, who has been in the top job for five weeks. A day before the vote, he had urged workers to accept the contract and not to strike, saying that it would jeopardize the company’s recovery.

Under the tentative agreement, Boeing had promised to build its next commercial jet in the Seattle area, a bid to win over workers after the…