In a recent development, Boeing Co. BA saw a minor pre-market dip on Tuesday. The decline comes in the wake of a potential strike by 32,000 of the company’s workers.
What Happened: The contract between Boeing and the International Association of Machinists is on the brink of expiration on Sep. 12. In the absence of a new agreement, the workers who assemble its aircraft in Washington state are gearing up for the company’s first strike in 16 years. Union local head Jon Holden expressed that the chances for a deal seem slim at the moment, CNN reported on Tuesday.
Holden pointed out that the primary disagreements include wages, health care, retirement, and time off. This potential strike adds to a series of high-profile problems for Boeing, which has been dealing with fatal crashes due to design flaws, allegations of prioritizing profits over quality and safety, a decrease in aircraft sales, and rising debt levels.
Despite both parties expressing a wish to avoid a strike, the resentment of union members over recent contract concessions and difficulties at the company could make reaching an agreement difficult.
Boeing’s shares were trading at $169 at the time of writing, 2.73% down from Monday’s closing price of $173.74, according to Benzinga Pro.
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Boeing issued a statement affirming their commitment to bargaining in good faith and focusing on the issues important to their employees and their families. However, Holden insisted that any deal that can gain the support of the workers needs to recapture some of the concessions the union surrendered in two previous agreements since 2008.
Why It Matters: The potential strike comes at a time when Boeing is already grappling with a safety crisis. Newly appointed CEO Kelly Ortberg, who replaced Dave Calhoun, recently relocated to Seattle to address these issues. The move followed criticism that the company had lost touch with its manufacturing roots.
Adding to the company’s woes, a Boeing 737 aircraft recently experienced engine trouble during an Alaska Airlines flight, forcing it to turn around. This incident occurred even as Boeing sees strong demand for planes in China, expecting its fleet to double by 2043.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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