Boeing and union hit strike impasse as company breaks off talks and withdraws pay offer | Labor Rights News

The nearly four-week-old strike between Boeing and its main manufacturing union shows no signs of breakthrough after talks collapsed and no new negotiations are planned.

The U.S.-based plane maker on Tuesday withdrew its wage offer for about 33,000 U.S. factory workers, saying the union had not seriously considered its proposals after two days of talks.

The collapse is exacerbating financial and production problems at Boeing, one of the two largest global makers of commercial aircraft, and creating a years-long backlog of deliveries to airlines that rely on Boeing.

The strike would cost Boeing more than $1 billion a month, S&P Global Ratings estimated, while warning of a downgrade of its debt to junk level. The debt burden is $60 billion. “The strike threatens Boeing’s recovery,” S&P wrote late Tuesday.

There are no signs of a resolution to the deadlock, a person briefed on the talks said.

“Unfortunately, the union did not seriously consider our proposals,” Stephanie Pope, head of Boeing Commercial Airplanes, said in a note to employees, calling the union’s demands “non-negotiable.”

“Further negotiations make no sense at this point,” she said.

The problems are deepening

Boeing has been burning cash in 2024 as it struggles to recover from a mid-air mishap on a new plane in January that exposed weak safety protocols and prompted U.S. regulators to cut its production.

Earlier this year, Boeing replaced its CEO Dave Calhoun with Kelly Ortberg, who started in August, hoping to secure an employment deal and bolster the company's reputation with customers and regulators. So far none of this has happened.

Boeing is currently exploring options to raise billions of dollars to strengthen its balance sheet. The Reuters news agency reported that the company was looking to sell stocks and equity-related securities because its coveted investment grade rating was at risk.

The company has also implemented temporary furloughs for thousands of employees while factories that make its best-selling 737 MAX and its 767 and 777 planes are closed.

Boeing's goal of increasing production of its 737 MAX planes to 38 per month is not expected to be realized until mid-2025, S&P said.

Its shares lost 2.4 percent in trading on Wednesday. The stock has lost more than 40 percent of its value this year.

Referring to the two days of negotiations, Pope said: “Our team negotiated in good faith and made new and improved proposals to reach a compromise, including an increase in take-home pay and pension.”

The International Association of Machinists and Aerospace Workers union rejected those claims, saying Boeing was “committed to sticking with the non-negotiated offer” proposed last month.

“They declined to propose wage increases, vacation/sick accruals, advancement opportunities, ratification bonuses, or the 401k match/SCRC contribution. They would also not reintroduce the defined benefit pension,” it said.

The union, which represents factory workers on the U.S. West Coast, wants a 40 percent wage increase over four years and the restoration of a defined benefit pension that was removed from the contract a decade ago.

More than 90 percent of workers rejected an offer of a 25 percent wage increase over four years before going on strike.

Boeing made an improved offer last month that it called its “best and final” offer that would give workers a 30 percent pay raise and restore a performance bonus. But a survey of its members found that wasn't enough, the union said.