Boeing’s factory workers are set to vote tomorrow on a proposal that could end its strike crisis
What you bring to the tray table… Boeing’s proposing a 35% pay hike over four years to 30K+ of its factory workers, who’ve been on strike for five weeks. The jet manufacturer and its machinists’ union reached the tentative deal on Saturday, and Boeing’s striking workers are set to vote on it tomorrow. The beleaguered plane maker is hoping employees will agree to the deal as it seeks to end a strike that’s halted most of its production. But the proposed pay falls short of the 40% hike the union demanded.
Boeing stock flew up yesterday as investors saw a resolution on the horizon, but it’s TBD whether workers will approve the deal. Last month the union rejected Boeing’s “best and final” offer of a 30% pay hike.
Busy day: Boeing’s also expected to report Q3 earnings tomorrow. Its deliveries rose from last year, but it’s expected to see the biggest brunt of the strike this quarter.
Reaching crisis altitude… There’s a lot on the line for Boeing and the companies that depend on it. The strike cost the aviation icon an estimated $5B in the first four weeks, and it could lose an additional billion for every month it goes on. Boeing suppliers have lost an estimated $900M, and its airline customers have racked up $285M in losses as deliveries get delayed. Last week Boeing said it would lay off 10% of its workers and try to raise up to $25B as it looks to avoid a cash crunch. It’s sitting on $60B in debt, and its credit score could get downgraded to junk status.
Peeling off the Band-Aid can be painful… Instead of meeting workers’ demands out of the gate, Boeing has made incremental bumps to its pay-hike proposals, which has contributed to the strike dragging on. That’s had painful effects, and not just for Boeing. Spirit AeroSystems, a major Boeing supplier, said it’ll furlough 700 workers because of the strike.