Boeing and union negotiators to resume talks next week amid strike, federal mediators say
About 30,000 workers in Seattle and Portland areas on strike
Boeing already wrestling with output delays, high debt
Strike poses a challenge for new CEO Kelly Ortberg
Shares down 3.7%
Recasts with plan to resume talks
By Joe Brock and David Shepardson
SEATTLE, Sept 13 (Reuters) - Boeing BA.N and union negotiators will return to the bargaining table early next week, U.S. federal mediators said on Friday, as the two sides try to end a strike threatening the airplane maker's turnaround.
The U.S. Federal Mediation & Conciliation Service late on Friday said it was convening the parties with a federal mediator after speaking to both sides, less than a day after union members voted by a huge majority to reject Boeing's contract offer and went on strike.
"The parties will resume meetings early next week," it said in a statement.
More than 30,000 members of the InternationalAssociation of Machinists and Aerospace Workers (IAM) who produce Boeing's top-selling 737 MAX and other jets in the Seattle and Portland areas voted on their first full contract in 16 years, with 94.6% rejecting Boeing's offer and 96% favoring a strike. Workers vowed to fight for a better pay offer than the company had made.
Shortly after midnight on the West Coast, strikingworkers started to gather outside Boeing factories in the Seattle area.
Chief Financial Officer Brian West said Boeing wants to get back to the negotiating table, saying the walkout will make it harder for the plane makerto meet the production target for the 737 MAX jet and stabilize its supply chain. The union was also eager to return to the table as quickly as possible.
"This is about fighting for our future," said Jon Holden, who headed negotiations for Boeing's largest union before announcing the strike vote result on Thursday.
Boeing declined to comment on the mediator's comments and the union was not immediately available for comment.
Workers have been protesting all week in Boeing factories in the Seattle area that assemble Boeing's MAX, 777 and 767 jets. On Friday evening, members in the union hall cheered and chanted "Strike! Strike! Strike!"
Boeing's stock fell 3.7% on Friday. It has tumbledalmost 40% sofar this year, slashing the company'smarket value by roughly $58 billion. Boeing's corporate bonds also lost value, with spreads between their yields and comparable U.S. Treasuries widening sharply.
A long strike could further damage Boeing's finances, already groaning due to a $60 billion debt pile. The planemaker needs to generate sufficient cash flow to meet payments on the debt. A strikealso would weigh on airlines that fly Boeing jets and suppliers that manufacture parts.
Moody's put the planemaker's rating on review, while Fitch said a prolonged strike could increase the risk of a downgrade. On Thursday, S&P Global Ratings said an extended strike could hurt Boeing's overall rating, which is one notch above junk status. A downgrade could increase Boeing's cost to issue debt.
Boeing said it had offered workers everything it could and now must reach a deal to end the strike while planning for investments needed to replace its best-selling single-aisle models. CFO West said the company would be “laser-like focused on action to conserve cash,” adding the strike will “jeopardize our recovery.”
New CEO Kelly Ortberg was brought in just weeks ago to restore faith in the planemaker after a door panel blew off a 737 MAX jet mid-air lastJanuary. He offered a contract including a pay rise of 25% over four years, far lower than the 40% workers had demanded. Union leaders recommended approval of the contract, but angry members voted overwhelmingly to strike and fight for the original 40% wage increase demand and an annual bonus.
Unionized workers from a range of sectors and companies including big automakers, delivery service UPS UPS.N and more have won double-digit wage increases recently, capitalizing on a tight labor market and demanding paychecks to fight inflation.
BOEING'S CHALLENGES
The proposed deal included a $3,000 signing bonus and a pledge to build Boeing's next commercial jet in the Seattle area, provided the program was launched within the contract term.
Equity research firm Melius Research showed median employee compensation for the aerospace and defense firms companies it monitors grew 12% between 2018 and 2023. It fell 6% for Boeing and 19% for Spirit Aerosystems, the maker of aerostructures that Boeing has agreed to acquire.
'AS LONG AS IT TAKES'
On Friday morning, crowds of striking workers began to descend on six different entrances at the Boeing facility, horns honking and raised fists out windows. Smiles of appreciation ensued when donuts arrived.
“I’m willing to strike for two months or even longer. Let’s go as long as it takes to get what we deserve,” said James Mann, a 26-year-old who works in a wings division.
President Joe Biden's administration was in touch with both sides, urging them "to negotiate in good faith toward an agreement that gives employees the benefits they deserve and makes the company stronger," White House spokesperson Robyn Patterson said.
One Boeing supplier said companies can mitigate losses from the strike using a Washington state program to provide some compensation for workers who have their hours cut. JPMorgan said Boeing could adjust the pace at which it takes material. "At a minimum, a prolonged strike could affect supplier growth expectations," said analyst Seth M. Seifman.
Boeing workers' last strike in 2008 shuttered plants for nearly two months and hit revenue by an estimated $100 million per day. According to TD Cowen, a 50-day strike could cost Boeing $3 billion to $3.5 billion of cash flow.
The planemaker has more than 4,700 orders for the 737 MAX jet, with Southwest Airlines LUV.N, United Airlines UAL.O, and Lion Air being the top three customers in queue for deliveries, according to aviation data provider Cirium.
United Airlines CFO Michael Leskinen said Boeing was "doing much better", with delivery rates stabilized. "There is the risk of the strike. I'm not going to opine on that. That would certainly be a speed bump."
Southwest, Cathay Pacific 0293.HK and flydubai said they were in touch with Boeing.
FACTBOX-Seven previous strikes by Boeing's US factory workers ID:nL8N3KV03N
TIMELINE-Boeing strike the latest challenge for troubled planemaker ID:nL6N3KQ01J
Boeing’s unending troubles https://reut.rs/3TmZ3mL
Boeing has lost $58 billion in market value so far in 2024 https://tmsnrt.rs/3XhotDG
Reporting by Joe Brock in Seattle, David Shepardson in Washington and Allison Lampert in Montreal; Additional reporting by Jamie Freed in Sydney, Lisa Barrington in Seoul, Medha Singh, Abhijith Ganapavaram and Shivansh Tiwary in Bengaluru, Gabriella Borter in Washington, Matt M. McKnight, in Seattle; Writing by Jamie Freed, Peter Henderson, Sayantani Ghosh and Carolina Mandl; Editing by Gerry Doyle, Elaine Hardcastle, Nick Zieminski, David Gregorio and Leslie Adler
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
