Boeing offered reforms to its key manufacturing union before talks broke down, but the changes were minor and did not help in critical areas. Resolve almost a month old strikea union negotiator told Reuters on Wednesday.
On Tuesday, Boeing said it had withdrawn it payment offer Nearly 33,000 members of the International Association of Machinists and Aerospace Workers (IAM) said after two days of talks that the union had not seriously considered its proposals.
The plane maker had said it had made new and improved offers to try to reach a compromise, including an increase in take-home pay.
John Holden, the union’s lead negotiator, told Reuters in an interview that Boeing offered some reforms related to minimum guarantees for annual performance bonuses, but did not move forward on general demands for higher wages.
“They’re trying to take credit for a very small, very minor movement that wasn’t really touching on the major issues in a way that we could even bring it to our members,” said Holden, president of IAM District 751. “
“The areas they haven’t improved are appalling.”
Holden said it was important for Boeing to drop its proposal because some of their members want to vote. He said the union is focused on the strike, and has a very “robust fund” to support paying for the strike, but he would not describe the status of negotiations as a stalemate.
“Unfortunately, the union did not seriously consider our proposals,” Stephanie Pope, the head of Boeing Commercial Airplanes, said in a note to employees Tuesday. He described the union’s demands as “non-negotiable.”
“There is no point in further talks at this point,” he said.
The breakdown has exacerbated financial and production problems at Boeing, one of the two primary global commercial aircraft makers, and increased a years-long backlog of deliveries for air carriers that rely on Boeing.
S&P Global Ratings estimates the strike will cost Boeing more than $1 billion per month, and has also warned of reducing its debt to junk territory. It has a debt of $60 billion. “The strike puts Boeing’s recovery at risk,” S&P wrote late Tuesday.
Boeing is burning cash in 2024 as it struggles to recover from a mid-air panel explosion on a new plane in January that exposed weak safety protocols and prompted US regulators to curb its production.
Earlier this year, Boeing Kelly Ortberg replaces CEO Dave CalhounThat began in August with hopes of completing a labor agreement and bolstering the company’s reputation among customers and regulators. Nothing like this has happened yet.
Boeing is now considering options to raise billions of dollars to strengthen its balance sheet. Reuters reported that it was looking to sell securities such as stocks and equities, putting its prized investment grade credit rating at risk.
The company has also presented floating holiday for thousands of salary workers, while factories producing its best-selling 737 MAX and its 767 and 777 planes remain closed.
S&P said Boeing’s goal of increasing production of its 737 Max planes to 38 per month likely won’t be accomplished until mid-2025.
Its shares closed down 3.4% on Wednesday. The stock has lost more than 40% of its value this year.
“Our team bargained in good faith and made new and improved proposals to try to reach agreement, including increased take-home pay and retirement benefits,” Pope said, referring to two days of talks.
The International Association of Machinists and Aerospace Workers union rejected those claims, saying Boeing was “bent on sticking to the non-negotiation offer” it proposed last month.
“They refused to offer any pay raises, vacation/sick leave, advancement, ratification bonuses, or 401k match/SCRC contributions. They will also not restore defined benefit pensions,” it said.
The union, which represents factory workers on the West Coast, wants a 40% wage increase over four years and the reinstatement of a defined-benefit pension that was eliminated in the contract a decade ago.
More than 90% of the workers rejected the offer of a 25% pay increase over four years before going on strike.
Boeing last month made an improved offer it described as its “best and final” that would give workers a 30% raise and restore performance bonuses, but the union said a survey of its members found it did not go far enough. Was.
