Boyd Group International president Mike Boyd joins Catalysts hosts Seana Smith and Madison Mills after more than 30,000 Boeing (BA) union workers voted to reject a new labor contract proposed by the aircraft manufacturer earlier this week. The labor union’s contract with Boeing expired at midnight.
With the overwhelming majority of union members voting in favor of a strike, Boyd says Boeing will “have to go back to the bargaining table and be a whole lot harder than they were before.”
“There’s no question about it; Boeing has its back against the wall” regarding product, public perception, and markets, Boyd adds, believing the union has “a lot of leverage” in negotiations.
Boeing has come under fire for safety concerns and federal probes into its manufacturing process throughout 2024, weighing on the stock and bringing it down by roughly 36% year-to-date.
“The new gentleman running the place has much more on his plate than just a strike,” Boyd tells the Catalysts team. The company brought on a new CEO, Kelly Ortberg, in an effort to improve perception around transparency and trust.
“Keep in mind this is an economic hit,” Boyd explains, saying, “there are a lot of suppliers out there across the US and internationally that being told this morning, don’t ship any more parts” after having “already gotten that message earlier with the slowdown on the 737 and 787 programs.”
Boeing’s entire infrastructure “right now is under severe stress,” the company is “forced to try to settle this as quickly as they can,” Boyd tells Yahoo Finance.
He notes that the company hasn’t invested in new products, which is “going to come back and bite them” as “they have nothing to replace the 737.”
Amid uncertainty around the sustainability of Boeing’s business, Boyd says the “only one game in town” now looks to be Airbus (AIR.PA)
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This post was written by Naomi Buchanan.
