Boeing (BA) on Tuesday withdrew its latest offer to union machinists after negotiations broke down as their strike heads into its fourth week.
The Arlington, Virginia-based firm’s offer — which it had labeled its “best and final proposal — had included 30% pay raises for the 33,000 factory workers who have been on the picket line since Sept. 13 after they rejected a tentative labor deal.
District 751 of the International Association of Machinists and Aerospace Workers (IAM), which represents those workers, has slammed Boeing’s offer as disrespectful. The union has argued that its workers need a 40% wage hike to combat the cost of living, a return to the pension system it gave up in a 2014 deal, more input into product safety, and other benefits.
“Unfortunately, the union did not seriously consider our proposals,” Boeing Commercial Airplanes head Stephanie Pope said in a note to the employees on Tuesday, according to Reuters. “Further negotiations do not make sense at this point,” Pope added as the executive called the IAM’s demands “non-negotiable.”
As the strike continues, its economic impact grows larger. There’s already some worry that it will throw off the November jobs report. In addition to the more than 30,000 workers who walked off the job, Boeing has initiated furloughs. Boeing’s issues — which began this year with an almost catastrophic incident involving a 737 Max 9 jet and has led to intense scrutiny of its operations — may also have repercussions for Boeing suppliers.
“The recent hurricane in Florida and the Carolinas and the Boeing strike have the potential to weigh on GDP growth for the remainder of the year,” Oxford Economics analysts wrote in a recent note.
S&P Global Mobility (SPGI) on Tuesday estimated that Boeing will incur a cash outflow of roughly $10 billion in 2024, partially due to the strike and measures taken to overhaul its manufacturing process, and issued a negative outlook for the company’s credit ratings. Boeing is expected to burn about $50 million a day in cash because of the strike.
Boeing is looking at options to raise billions of dollars, Reuters (TRI) reported, including selling stock and equity-like securities.
