Business briefs
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Boeing factory workers vote whether to strike and shut down production
SEATTLE | Boeing waited to learn Thursday whether 33,000 aircraft assembly workers, most of them in the Seattle area, will go on strike and shut down production of the company’s best-selling planes.
Members of the International Association of Machinists and Aerospace Workers were voting on whether to approve a contract offer that includes 25% pay raises over four years. If the factory workers reject the contract and two-thirds of them vote to strike, a work stoppage would begin Friday at 12:01 a.m. PDT.
A walkout would not cause flight cancellations or directly affect airline passengers, but it would be another blow to Boeing’s reputation and finances in a year marked by problems in its airplane, defense and space operations.
New CEO Kelly Ortberg made a last-ditch effort to avert a strike, telling machinists Wednesday that “no one wins” in a walkout.
“For Boeing, it is no secret that our business is in a difficult period, in part due to our own mistakes in the past,” he said. “Working together, I know that we can get back on track, but a strike would put our shared recovery in jeopardy, further eroding trust with our customers and hurting our ability to determine our future together.”
Many union members have posted complaints about the deal all week on social media. On Thursday, several dozen blew whistles, banged drums and held up signs calling for a strike as they marched to a union hall near Boeing’s 737 Max plant in Renton, Washington.
“As you can see, the solidarity is here,” said Chase Sparkman, a quality-assurance worker. “I’m expecting my union brothers and sisters to stand shoulder to shoulder, arm in arm, and let our company know that, hey, we deserve more.”
The machinists make $75,608 per year on average, not counting overtime, and that would rise to $106,350 at the end of the four-year contract, according to Boeing.
However, the deal fell short of the union’s initial demand for pay raises of 40% over three years. The union also wanted to restore traditional pensions that were axed a decade ago but settled for an increase in Boeing contributions to employee’s 401(k) retirement accounts.
Although the bargaining committee that negotiated the contract recommended ratification, IAM District 751 President Jon Holden predicted earlier this week that workers would vote to strike. .
Boeing worker Adam Vogel called the 25% raise “a load of crap. We haven’t had a raise in 16 years.”
Broderick Conway, another quality-assurance worker and 16-year Boeing employee, said the company can afford more.
“A lot of the members are pretty upset about our first offer. We’re hoping that the second offer is what we’re looking for,” he said. “If not … we’re going to keep striking and stand up for ourselves.”
The head of Boeing’s commercial-airplanes business, Stephanie Pope, tried earlier this week to discourage workers from thinking a strike would result in a better offer.
“We bargained in absolute good faith with the IAM team that represents you and your interests,” she said. “Let me be clear: We did not hold back with an eye on a second vote.”
Voting began at 5 a.m. local time at union halls in Washington state, Portland, Oregon, and a smattering of other locations. The union planned to announce the results Thursday night.
A strike would stop production of the 737 Max, the company’s best-selling airliner, along with the 777 or “triple-seven” jet and the 767 cargo plane at factories in Everett and Renton, Washington, near Seattle. It likely would not affect Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina.
TD Cowen aerospace analyst Cai von Rumohr said it is realistic based on the history of strikes at Boeing to figure that a walkout would last into mid-November, when workers’ $150 weekly payments from the union’s strike fund might seem low going into the holidays.
A strike that long would cost Boeing up to $3.5 billion in cash flow because the company gets about 60% of the sale price when it delivers a plane to the buyer, von Rumohr said.
Union negotiators unanimously recommended that workers approve the tentative contract reached over the weekend.
Boeing promised to build its next new plane in the Puget Sound area. That plane — not expected until sometime in the 2030s — would replace the 737 Max. That was a key win for union leaders, who want to avoid a repeat of Boeing moving production of Dreamliners from Everett to South Carolina.
Holden told members Monday the union got everything it could in bargaining and recommended approval of the deal “because we can’t guarantee we can achieve more in a strike.”
Many union members, however, are still bitter about previous concessions on pensions, health care and pay.
“They are upset. They have a lot of things they want. I think Boeing understands that and wants to satisfy a fair number of them,” said von Rumohr, the aerospace analyst. “The question is, are they going to do enough?”
Boeing has seen its reputation battered since two 737 Max airliners crashed in 2018 and 2019, killing 346 people. The safety of its products came under renewed scrutiny after a panel blew out of a Max during a flight in January.
The U.S. is preparing criminal charges
in Iran hack targeting Trump
WASHINGTON | The Justice Department is preparing criminal charges in connection with an Iranian hack that targeted Donald Trump’s presidential campaign in a bid to shape the outcome of the November election, two people familiar with the matter said Thursday.
It was not immediately clear when the charges might be announced or whom precisely they will target, but they are the result of an FBI investigation into an intrusion that investigators across multiple agencies quickly linked to an Iranian effort to influence American politics.
The prospect of criminal charges comes as the Justice Department has raised alarms about aggressive efforts by countries including Russia and Iran to meddle in the presidential election between Trump and Democratic nominee Kamala Harris, including by hacking and covert social media campaigns designed to shape public opinion.
Iran “is making a greater effort to influence this year’s election than it has in prior election cycles and that Iranian activity is growing increasingly aggressive as this election nears,” Assistant Attorney General Matthew Olsen, the Justice Department’s top national security official, said in a speech Thursday in New York City.
“Iran perceives this year’s elections to be particularly consequential in impacting Iran’s national security interests, increasing Tehran’s inclination to try to shape the outcome,” he added.
The Trump campaign disclosed on Aug. 10 that it had been hacked and said Iranian actors had stolen and distributed sensitive internal documents. At least three news outlets — Politico, The New York Times and The Washington Post — were leaked confidential material from inside the Trump campaign. So far, each has refused to reveal any details about what it received.
Politico reported that it began receiving emails on July 22 from an anonymous account. The source — an AOL email account identified only as “Robert” — passed along what appeared to be a research dossier that the campaign had apparently done on the Republican vice presidential nominee, Ohio Sen. JD Vance. The document was dated Feb. 23, almost five months before Trump selected Vance as his running mate.
The FBI, the office of the Director of National Intelligence and the Cybersecurity and Infrastructure Security Agency subsequently blamed that hack, as well as an attempted breach of the Biden-Harris campaign, on Iran.
Those agencies issued a statement saying that the hacking and similar activities were meant to sow discord, exploit divisions within American society and influence the outcome of elections.
The statement did not identify whether Iran has a preferred candidate, though Tehran has long appeared determined to seek retaliation for a 2020 strike Trump ordered as president that killed an Iranian general.
The two people who discussed the looming criminal charges spoke on condition of anonymity to The Associated Press because they were not authorized to speak publicly about a case that had not yet been unsealed.
The Washington Post first reported that charges were being prepared.
Justice Department officials have been working to publicly call out and counter election interference efforts. The response is a contrast to 2016, when Obama administration officials were far more circumspect about Russian interference they were watching that was designed to boost Trump’s campaign.
“We have learned that transparency about what we are seeing is critical,” Olsen, the Justice Department official, said Thursday.
“It helps ensure that our citizens are aware of the attempts of foreign government to sow discord and spread falsehoods — all of which promotes resilience within our electorate,” he added. “It provides warnings to our private sector so they can better protect their networks. And it sends an unmistakable message to our adversaries — we’ve gained insight into your networks, we know what you’re doing, and we are determined to hold you accountable.”
Last week, in an effort to combat disinformation ahead of the election, the Justice Department charged two employees of RT, a Russian state media company, with covertly funneling a Tennessee-based content creation company nearly $10 million to publish English-language videos on social media platforms with messages in favor of the Russia government’s interests and agenda.
U.S. filings for unemployment benefits inch up
Slightly more Americans filed for unemployment benefits last week, but layoffs remain at historically low levels despite two years of elevated interest rates.
Jobless claims rose by 2,000 to 230,000 for the week of Sept. 7, the Labor Department reported Thursday. That number matches the number of new filings that economists projected.
The four-week average of claims, which smooths out some of week-to-week volatility, ticked up by 500, to 230,750.
The total number of Americans collecting jobless benefits rose by a modest 5,000, remaining in the neighborhood of 1.85 million for the week of Aug. 31.
Weekly filings for unemployment benefits, considered a proxy for layoffs, remain low by historic standards, though they are up from earlier this year.
During the first four months of 2024, claims averaged a just 213,000 a week, but they started rising in May. They hit 250,000 in late July, adding to evidence that high interest rates were finally cooling a red-hot U.S. job market.
Employers added a modest 142,000 jobs in August, up from a paltry 89,000 in July, but well below the January-June monthly average of nearly 218,000.
Last month, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total supports evidence that the job market has been slowing steadily and reinforces the Fed’s plan to start cutting interest rates later this month.
The Fed, in an attempt to stifle inflation that hit a four-decade high just over two years ago, raised its benchmark interest rate 11 times in 2022 and 2023. That pushed it to a 23-year high, where it has stayed for more than a year.
Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.
Most analysts are expecting the Fed to cut its benchmark rate by only a traditional-sized quarter of a percentage point at its meeting next week, not the more severe half-point that some had been forecasting.
DHL sues MyPillow, alleging company founded owes $800,000
MINNEAPOLIS | Package delivery company DHL is suing MyPillow, alleging the company synonymous with its founder, chief pitchman and election denier Mike Lindell owes nearly $800,000 for unpaid bills.
The lawsuit is the latest legal dispute to emerge against MyPillow and Lindell, a prominent supporter of Donald Trump who has helped amplify the former president’s false claims that the 2020 election was stolen from him.
In the lawsuit filed in Hennepin County District Court in Minneapolis on Monday, the DHL eCommerce unit alleges that MyPillow is in violation of a contract that requires the Minnesota-based company to pay for all parcel delivery services within 15 days of being billed. The lawsuit says they reached a settlement in May 2023 that required MyPillow to pay $775,000 in 24 monthly installments starting in April of this year.
But the lawsuit alleges that MyPillow has made only partial payments on that settlement, totaling $64,583.34, with the last one received on June 6. DHL says it notified MyPillow that it was in default on July 2. The lawsuit seeks $799,925.59, plus interest and attorney fees.
Lindell told The Associated Press on Thursday that he didn’t know what the lawsuit was about, but that his company decided to stop using DHL over a year ago in a dispute over shipments that he said was DHL’s fault.
Lawsuits and billing disputes are nothing new for the “MyPillow Guy.” He’s being sued for defamation by two voting machine companies. Lawyers who were originally defending him in those cases quit over unpaid bills.
A credit crunch last year disrupted cash flow at MyPillow after it lost Fox News as one of its major advertising platforms and was dropped by several national retailers. A judge in February affirmed a $5 million arbitration award to a software engineer who challenged data that Lindell said proved that China interfered in the 2020 election.
—From AP reports
