Boeing freezes hiring, weighs furloughs as strike enters fourth day
Boeing union workers rejected labor deal last week
Negotiations due to restart Tuesday, union says
Union members angry about decade of wage stagnation
Boeing battling jet production, debt crises
Adds analyst comment and estimates on daily losses, detail on supply chain impact
By Joe Brock, Allison Lampert and David Shepardson
SEATTLE, Sept 16 (Reuters) - Boeing is freezing hiring and weighing temporary furloughs to cut costs as a strike by more than 30,000 workers entered its fourth day on Monday.
The planemaker and union leadership badly misjudged anger among union members who backed a strike with 96% support last week, stopping production of its 737 series just as Boeing was trying to speed up assembly lines. Now executives need to find a way to contain the work stoppage with a fresh offer in talks which resume on Tuesday.
"This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future," CFO Brian West told employees in a letter on Monday. Boeing BA.N will stop issuing the majority of supplier purchase orders on the 737, 767 and 777 programs affected by the stoppage, West wrote, adding, "I know that these actions will create some uncertainty and concern."
West last week said that the first priority was preserving Boeing's credit rating, which is hovering one notch above junk.
The decision to stop placing most orders for parts for all Boeing jetliner programmes except the 787 Dreamliner is exceptionally rare and will send shockwaves through an industry still struggling to rebuild from the bottom up after COVID-19.
Some executives immediately warned of a vicious cycle of departures just as the industry is battling competition from other sectors to attract new aerospace workers and engineers.
"The smaller companies don’t have the cash to ride this out so they will start layoffs," a senior supply chain source said. "Then those people won’t come back immediately and round the cycle goes again."
SAFETY AND PRODUCTION CRISIS
Even before its factory workers downed tools, Boeing was wrestling with a safety and production crisis sparked by a door panel flying off a near-new 737 MAX plane in midair in January and is saddled with $60 billion of debt.
"We believe an extended strike would be costly and difficult to absorb, given the company's already strained financial position," said S&P Global Ratings in a note on Monday. "A shorter strike, on the order of weeks, would likely be manageable for Boeing and not lead to a negative rating action."
Equity analyst Chris Olin at Northcoast Research said that Boeing would likely have to cut 33-35 jets from its production plan because of the strike, resulting in $102 million lost revenue daily and as much as $3 billion or more overall.
The International Association of Machinists and Aerospace Workers (IAM) rejected an offer that included a 25% pay increase spread over four years but removed an annual performance bonus. The union originally had asked for a 40% hike.
Union leaders will meet with federal mediators and Boeing on Tuesday, the IAM said in a post on its X social media feed on Saturday.
Jon Holden, the lead union negotiator, said on Saturday that workers wanted Boeing to increase its wage offer and reinstate a defined-benefit pension that was taken away a decade ago in return for keeping plane production in Washington State.
Two union sources told Reuters they didn't expect Boeing to restore the old pension, but that demand could be used to negotiate bigger company pension contributions and higher pay.
Union members on the picket lines outside Boeing factories around Seattle were bullish about their chances of getting a better deal out of Boeing, but few expect it to happen quickly.
"Not with the history of the way Boeing and the union have negotiated in the past," said Chris Ginn, a 37-year-old who works in a factory north of Seattle building 777 jets.
'PAYCHECK TO PAYCHECK'
This is the eighth strike since the IAM's Boeing arm was established in the 1930s. The last two, in 2008 and 2005, lasted 57 days and 28 days, respectively.
Reuters spoke to five workers who were using these previous stoppages as a benchmark for their financial planning since they won't receive their salaries during the strike. The union provides $250 a week to striking members.
"I can go for six weeks, eight weeks, but it's up to Boeing management to decide when they want to offer a fair deal," said Thinh Tan, an engineer in the 737 MAX factory.
Many factory workers are venting anger that has been brewing for more than a decade as they watched their wages lag inflation, while executive bonuses ballooned.
"I live paycheck to paycheck," said Ginn, clutching his son in one arm and an 'On Strike Against Boeing' placard in the other.
INSIGHT-Boeing bosses blindsided by strike, on brink of crisis ID:nL1N3KY0EJ
FACTBOX-Seven previous strikes by Boeing's US factory workers ID:nL8N3KV03N
Boeing to plead guilty to fraud in US probe of fatal 737 MAX crashes ID:nL1N3J003F
Boeing and union negotiators to resume talks next week amid strike, federal mediators say ID:nL1N3KV044
Boeing's new CEO Kelly Ortberg faces a major overhaul, from factories to finances ID:nL1N3JN1WV
ANALYSIS-Airlines try to leverage Boeing woes despite lack of alternatives ID:nL3N3FQ3DQ
ANALYSIS-Boeing's Spirit Aero bid could help supply chain but is no cure-all ID:nL3N3FI30D
Ratings agencies warn of downgrade if Boeing strike drags on ID:nL4N3KV1E3
GRAPHIC-Boeing’s unending troubles https://reut.rs/3Tq0X68
GRAPHIC-IAM strikes at Boeing's Seattle/Wichita locations https://reut.rs/3XaHurg
Reporting by Joe Brock; Editing by Christopher Cushing, Peter Henderson and Nick Zieminski
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تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
