Boeing BA will restart contract negotiations on Wednesday with its largest union.
What Happened: The talks will involve federal mediators after the two sides failed to agree on wages and pensions on Tuesday. The International Association of Machinists and Aerospace Workers (IAM), representing over 30,000 Boeing factory workers, has been on strike since last Friday.
The union is demanding a 40% wage increase over four years, significantly higher than Boeing’s 25% offer, which was overwhelmingly rejected, Reuters reported.
IAM expressed frustration on X, stating, “The company was not prepared and was unwilling to address the issues essential for ending this strike: Wages and Pension.”
The strike has disrupted the production of Boeing’s popular 737 MAX jets and other widebody aircraft, causing delays in deliveries to airlines. Boeing has announced a hiring freeze and is considering temporary furloughs to manage costs, as the company is already dealing with $60 billion in debt.
Why It Matters: The strike by over 30,000 workers has already had significant repercussions. Boeing’s stock has been falling since the strike began, exacerbated by the company’s announcement of a hiring freeze and potential furloughs. The measures were outlined by CFO Brian West, who emphasized the urgent need to preserve cash amid the strike.
The union’s demands for higher wages and better pensions are a critical sticking point. IAM President Jon Holden has indicated that the strike could last a while. The machinists, who produce key aircraft models like the 737 Max and the 777, are standing firm on their demands.
Analysts have also weighed in on the situation. BofA Securities analyst Ronald J. Epstein suggested that Boeing might need to offer additional concessions to resolve the strike, despite the company’s multi-billion dollar debt. Epstein noted that the strike could further delay Boeing’s plans to ramp up production rates for its 737 jets, initially scheduled for September 2024 but now pushed to March 2025.
Price Action: Boeing closed at $156.39 on Tuesday, according to Benzinga Pro.
Read Next:
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
