As the strike drags on, Boeing is examining options to raise billions of dollars to shore up its balance sheet | Boeing strike
The lead negotiator for a Boeing union representing about 33,000 workers who have been on strike for nearly a month said on Wednesday that members were prepared to wait out the planemaker, after pay talks collapsed a day earlier.
“We’re in this for the long haul and our members understand that,” Jon Holden said in an interview with Reuters.
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He said Boeing offered only minor improvements before breaking off talks on Tuesday and the union had a strong fund to support paying members $250 a week during the stoppage.
Reaching an accepted deal is critical for Boeing. Ratings agency S&P estimates the strike is costing it $1 billion a month and it is at risk of losing its prized investment grade credit rating.
Even before the strike began on Sept 13, the company had been burning cash as it struggled to recover from a January mid-air panel blowout on a new plane that exposed weak safety protocols and spurred US regulators to curb its production.
The walkout by the US West Coast members of the International Association of Machinists and Aerospace Workers (IAM) shut production of Boeing’s strong-selling 737 MAX and 767 and 777 jets.
A letter sent on Wednesday from around 20 House Democrats to Boeing CEO Kelly Ortberg, Holden and the international president of the IAM urged the two sides to bargain in good faith to reach a fair contract in a “timely manner.”
Boeing declined to comment on the letter.
Shares of the US planemaker closed down 3.4 per cent on Wednesday.
The stock has lost more than 40 per cent of its value in 2024.
Offer withdrawn
Boeing said on Tuesday it had withdrawn its pay offer to the IAM after two days of talks and accused the union of not seriously considering its proposals.
The planemaker made an improved offer last month that would give workers a 30 per cent raise and restore a performance bonus. But the union declined to hold a vote on the proposal Boeing called its “best and final”, arguing a survey of its members found that it was not enough.
Holden said on Wednesday that some of his members wanted to vote on the proposal but there was no longer an offer from Boeing on the table. He declined to specify what would need to be included in a negotiated offer he could bring to a vote.
Holden said Boeing offered some improvements related to minimum guarantees for an annual performance bonus but did not move on general demands for higher wages that are key for members. The union wants a 40 per cent pay rise over four years and improvements to retirement benefits after more than 90 per cent voted down a proposed contract offering a 25 per cent pay rise last month.
“They’re trying to take credit for very minor, very meager movement that wasn’t really touching on the major issues in a way that we could even get that in front of our members,” said Holden, president of IAM District 751.
“The areas where they didn’t make improvements are glaring.” Boeing Commercial Airplanes head Stephanie Pope on Tuesday described the union’s demands as “non-negotiable.” “Further negotiations do not make sense at this point,” she said in a note to employees.
Holden said he would not describe the current breakdown in talks as an “impasse,” adding “we feel strongly that there’s lots of movement that can be made.”
As the strike drags on, Boeing is examining options to raise billions of dollars to shore up its balance sheet. Reuters reported that it was looking to sell stock and equity-like securities.
The company has also introduced temporary furloughs for thousands of salaried employees.
Ratings agency S&P estimates the strike to cost Boeing more than $1 billion per month, despite the cost-saving measures the planemaker implemented in response to the production halt.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Oct 10 2024 | 9:53 AM IST
