Union members hold picket signs during a news conference following a vote count on the union contract on the IAM District 751 Fundamental Union Hall in Seattle, Washington, US, on Thursday, Sept. 12, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Boeing CFO Brian West said the labor strike that began just after midnight Friday will hurt aircraft deliveries and “jeopardize” the corporate’s recovery, hours after factory staff overwhelmingly rejected a latest labor contract and walked off the job.
West said the financial impact of the strike will depend upon how long it lasts, but that it’s going to affect the corporate’s production of its bestselling planes, including its money cow bestseller, the 737 Max, which is produced in Renton, Washington.
“The strike will impact production and deliveries and our operations and can jeopardize our recovery,” West said at a Morgan Stanley conference on Friday. “So our immediate focus is to the laser-like deal with actions to conserve money, and we’ll.”
Boeing factory staff gather on a picket line in the course of the first day of a strike near the doorway of a production facility in Renton, Washington, U.S., September 13, 2024.
Matt Mills Mcknight | Reuters
He said Boeing’s priority is to get back to the bargaining table and “reach an agreement that is good for our people, their families, our community.”
Boeing shares fell sharply on Friday after Moody’s put all of Boeing’s credit rankings on review for a downgrade and Fitch Rankings said a chronic strike could put Boeing prone to a downgrade, actions that might drive up the borrowing costs of a manufacturer that already has mounting debt.
Boeing shares closed nearly 4% lower Friday.
West declined to say whether the corporate could meet a rate of manufacturing 38 737 Max planes per thirty days by the top of the yr.
Jefferies aerospace analyst Sheila Kahyaoglu had previously estimated that a 30-day strike could possibly be a $1.5 billion hit for Boeing.
West said Boeing’s immediate focus could be “on actions to conserve money” and added that latest CEO Kelly Ortberg could be working to revive relationships with the union.
Boeing and the International Association of Machinists and Aerospace Employees had unveiled a tentative labor agreement on Sunday that included 25% wage increases over 4 years and other improvements to health-care and retirement advantages. But staff had been searching for raises of 40% and argued that it didn’t cover the increased cost of living.
Employees within the Seattle area and in Oregon voted 94.6% to reject the proposal, and 96% voted in favor of a strike.
They walked off the job after midnight on Friday.
Boeing machinists last went on strike in 2008, a piece stoppage that lasted nearly two months.
The potential production disruption comes because the manufacturer has been facing a slew of issues. It’s struggled to ramp up production and restore its popularity following safety crises.
A door plug blowout on a virtually latest Boeing 737 Max 9 in January led the Federal Aviation Administration to bar Boeing from increasing output of its Max planes and the FAA to spice up inspections at production plants, until the regulator is satisfied with its safety and quality procedures there.
An FAA spokeswoman told CNBC on Friday that the agency will keep its inspectors at Boeing facilities in the course of the strike.
