Editor’s Note: This story has been updated to correctly reflect that Boeing’s credit rating has been placed under negative watch by S&P Global Ratings.
Boeing Co. BA announced that further negotiations with striking workers are currently unfeasible. According to a statement released on Tuesday, the strike in the Pacific Northwest has significantly disrupted the company’s operations, affecting both business and community.
What Happened: The company’s leadership, led by Stephanie Pope, president and CEO of Boeing Commercial Airplanes, mentioned in the statement the company has been striving to reach an agreement with the union. Despite three rounds of bargaining, including recent negotiations with a federal mediator, no compromise was achieved. Boeing is said to have made improved proposals, including better pay and retirement benefits, but these were reportedly not seriously considered by the union.
“Given that position, further negotiations do not make sense at this point and our offer has been withdrawn,” Pope mentioned in the statement.
The company expressed disappointment over the outcome but remains open to future negotiations when the union is ready to engage in discussions that balance employee recognition and the company’s sustainability.
Why It Matters: The ongoing strike by Boeing’s machinist union has entered its fourth week, prompting S&P Global Ratings to place Boeing’s credit rating on negative watch. The rating agency highlighted potential cash outflows of approximately $10 billion in 2024 due to strike-related costs and a manufacturing process overhaul.
In addition to financial strains, Boeing is grappling with safety issues. The U.S. Federal Aviation Administration (FAA) recently issued an alert regarding potential rudder system jams on Boeing 737 airplanes due to a faulty part. The National Transportation Safety Board (NTSB) has urged both the FAA and Boeing to address these safety concerns promptly.
Price Action: As per Benzinga Pro, at the time of writing, Boeing was trading 1.36% lower
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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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