December 25, 2024

On September 13, 2024, members of the Boeing Machinists Union picketed outside a Boeing factory in Renton, Washington.

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It has already exceeded 30,000 in just over a month. boeing company The mechanics resigned after voting overwhelmingly to reject a tentative contract. Since then, costs and tensions have only grown.

The strike increases pressure on new Boeing Chief Executive Kelly Ortberg, who was appointed this summer to resolve the plane maker’s troubles. S&P Global Ratings estimates the strike, which costs Boeing more than $1 billion a month, caps an already difficult year that began with the near-catastrophic 737 Max door jam blowout. , six years ago, the first of two fatal Max crashes left Boeing in trouble.

The union and the company remain at an impasse, and aircraft production has been idled at factories in the Seattle area and other locations, leaving Boeing short of cash. Boeing last week withdrew a more favorable contract offer that the union had rejected, saying it was not negotiable.

Boeing executives expressed optimism about a deal weeks before the initial vote, people familiar with the matter said.

But this optimism did not materialize, and on September 13, workers voted 95% against the original tentative collective bargaining agreement.

“They have to raise their offer. There’s no doubt about it,” said Harry Katz, a professor at Cornell University’s School of Industrial and Labor Relations who studies collective bargaining. But he said one of the union’s demands, the reinstatement of the pension scheme, was unlikely to materialize and estimated the strike could last another two to five weeks.

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The process of ending the strike has become more fraught, with federally mediated talks breaking down in midweek.

Boeing Co said Thursday it has filed unfair labor practice charges with the National Labor Relations Board, accusing the International Association of Machinists and Aerospace Workers of negotiating in bad faith and misrepresenting the planemaker’s proposals.

On Friday evening, Jon Holden, president of the striking workers’ union IAM District 751, urged a return to negotiations.

“CEO Ortberg has an opportunity to do things differently, rather than using the same old industrial relations threats to intimidate and repress anyone who dares to resist,” he said in a statement. “Ultimately, it will be up to our Members decide whether to accept any negotiated contract offer and they want a solution that is negotiated and meets their needs.”

Boeing’s unionized machinists did not receive pay and lost company-backed health insurance in late September. However, unlike the last Boeing factory strike in 2008, there are more contract jobs available in the Seattle area to help workers fill gaps. Union message boards post job opportunities such as driving food delivery services and warehouse jobs.

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A Boeing 737 MAX aircraft is assembled at the Boeing Renton plant in Renton, Washington, on June 25, 2024.

Jennifer Buchanan | AFP | Getty Images

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“We also need to focus our resources on performance and innovation in our core areas rather than spreading ourselves across too many efforts, which often results in underperformance,” Ortberg said in a note to employees on Friday. and underinvestment.

S&P Global Ratings warned the company last week that it was at risk of being downgraded to junk status as the suspension of production of Boeing’s best-selling 737 Max and its 767s and 777s cost the company more than $1 billion a month. This estimate includes previously announced cost-cutting measures such as furloughs, a hiring freeze and the discontinuation of purchase orders for most affected aircraft.

Bank of America aerospace analyst Ron Epstein said in a note on Friday that Boeing “is facing quality, labor relations, program execution and cash burn issues that appear to have created an ongoing doom cycle.” He said early financial reports released by Boeing on Friday could indicate that up to $15 billion in equity financing is in the works.

A Boeing 737 fuselage is installed on a railcar at the Spirit AeroSystems plant in Wichita, Kansas, USA, Monday, July 1, 2024.

Nick Oxford | Bloomberg | Getty Images

The announcement of the layoffs follows efforts by Boeing and others in the aerospace supply chain to hire and train new machinists and other specialists after acquiring and laying off thousands of workers during the pandemic.

Boeing’s instability could spill over into its suppliers. Boeing 737 airframe manufacturer, spirit aerospace systems inc.A spokesman said furloughing staff was being considered as part of a cost-cutting contingency plan, but no decision had been made yet. Boeing is acquiring the company.

“They may be telling us a story about cost savings to help them get through this,” Aboulafia said of Boeing’s latest cost-cutting plan. “When did something go wrong that stopped them from trying again?”

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