The lead negotiator for the International Association of Machinists and Aerospace Workers (IAM), representing approximately 33,000 striking Boeing workers, stated on Wednesday that union members are ready for a prolonged strike following the collapse of pay negotiations.
The breakdown in talks occurred after Boeing offered only minor concessions on Tuesday, leading to a suspension of negotiations. According to Holden, the union has a robust strike fund that provides $250 a week to its members during the work stoppage.
The strike, which began on September 13, is having significant financial repercussions for Boeing. Ratings agency S&P estimates that the ongoing walkout is costing the company around $1 billion each month. Furthermore, Boeing faces the potential risk of losing its prized investment-grade credit rating. The company’s cash reserves were already under pressure due to a January incident involving a mid-air panel failure on a new aircraft, which exposed critical safety deficiencies and prompted U.S. regulators to limit production.
The strike has halted the production of Boeing’s highly sought-after 737 MAX, as well as the 767 and 777 jets. In response to the ongoing labor dispute, around 20 House Democrats sent a letter to Boeing CEO Kelly Ortberg, urging both sides to engage in good faith negotiations to arrive at a fair contract promptly. Boeing has yet to comment on the letter.
On Tuesday, Boeing announced it was retracting its pay offer to the IAM, accusing the union of not taking its proposals seriously. Last month, Boeing had presented a plan that included a 30% wage increase and the reinstatement of a performance bonus. However, the union rejected the proposal and did not submit it to a vote, asserting that feedback from a member survey indicated it was insufficient.
Despite some minor adjustments concerning annual performance bonuses, Holden asserted that Boeing’s latest proposals did not adequately address the union’s core demands for significant wage increases. The IAM is seeking a 40% pay raise over four years, as well as enhancements to retirement benefits, following a previous contract proposal that offered a 25% increase but was rejected by over 90% of union members.
As the strike continues, Boeing is exploring various financial strategies to bolster its balance sheet, including plans to sell stock and equity-like securities. Additionally, the company has implemented temporary furloughs for thousands of salaried employees. The financial strain from the strike underscores the urgent need for a resolution as Boeing faces an estimated $1 billion in losses each month despite implementing cost-saving measures in response to the production halt.
Read more:
New York City Implements 20 Mph Speed Limit As Sammy’s Law Takes Effect
Siemens Sues Citgo Parent Company Over $200 Million Default
Magellan Diagnostics Fined $32.7 Million For Lead Testing Fraud