Boeing (BA) continues to face significant operational and financial difficulties as its machinists union rejected a new contract proposal, extending a strike that has crippled production for six weeks. The rejection marks a critical moment for the company as it navigates labor disputes and financial setbacks under new leadership.
Union Rejects Contract Offer Amid Demands for Better Compensation
On October 24, 2024, Boeing's machinists union, representing 33,000 members of the International Association of Machinists (IAM), voted 64% against a contract that would have provided a 35% wage increase over four years. The workers, who have been on strike since September 13, 2024, are pushing for a 40% wage hike and the reinstatement of Boeing’s pension plan.
Union leaders Jon Holden (President of IAM District 751) and Brandon Bryant (President of IAM District W24) stated, “Ten years of holding workers back unfortunately cannot be undone quickly or easily. But we will continue to negotiate in good faith until we have made gains that workers feel adequately make up for what the company took from them in the past.”
Financial Losses and Prolonged Cash Burn
The strike exacerbates Boeing's financial struggles, with the company posting a significant loss in the third quarter. According to a transcript from AlphaSense, Boeing also projected that its ongoing cash burn will extend into 2025. These financial pressures have led the company to announce plans to lay off about 10% of its workforce and raise up to $25 billion over the next three years through debt and equity offerings.
Stock Price Decline and Leadership Challenges
Boeing's stock has been severely impacted, having lost 40% of its value this year. In premarket trading following the news of the rejected contract, the stock was down another 2%. The challenges come at a critical time for newly appointed CEO Kelly Ortberg, who took over in August 2024 and is now tasked with addressing both the strike and the company’s worsening financial situation.
Boeing's ability to navigate these ongoing labor disputes and financial struggles will be critical to its future stability and investor confidence.
Union Rejects Contract Offer Amid Demands for Better Compensation
On October 24, 2024, Boeing's machinists union, representing 33,000 members of the International Association of Machinists (IAM), voted 64% against a contract that would have provided a 35% wage increase over four years. The workers, who have been on strike since September 13, 2024, are pushing for a 40% wage hike and the reinstatement of Boeing’s pension plan.
Union leaders Jon Holden (President of IAM District 751) and Brandon Bryant (President of IAM District W24) stated, “Ten years of holding workers back unfortunately cannot be undone quickly or easily. But we will continue to negotiate in good faith until we have made gains that workers feel adequately make up for what the company took from them in the past.”
Financial Losses and Prolonged Cash Burn
The strike exacerbates Boeing's financial struggles, with the company posting a significant loss in the third quarter. According to a transcript from AlphaSense, Boeing also projected that its ongoing cash burn will extend into 2025. These financial pressures have led the company to announce plans to lay off about 10% of its workforce and raise up to $25 billion over the next three years through debt and equity offerings.
Stock Price Decline and Leadership Challenges
Boeing's stock has been severely impacted, having lost 40% of its value this year. In premarket trading following the news of the rejected contract, the stock was down another 2%. The challenges come at a critical time for newly appointed CEO Kelly Ortberg, who took over in August 2024 and is now tasked with addressing both the strike and the company’s worsening financial situation.
Boeing's ability to navigate these ongoing labor disputes and financial struggles will be critical to its future stability and investor confidence.