A protracted labor battle could cost Boeing several billion dollars, further straining finances and threatening its credit rating
The strike, Boeing’s first since 2008, adds to a tumultuous year for the planemaker which began when a door panel blew off a new 737 MAX jet in mid-air in January.
A protracted labor battle could cost Boeing several billion dollars, further straining finances and threatening its credit rating, analysts said.
“It’s unlikely that the cuts will fully offset the costs of a prolonged strike”, said Ben Tsocanos, aerospace director at S&P Global Ratings.
Boeing and the International Association of Machinists and Aerospace Workers (IAM) are talking in the presence of federal mediators. The union said Tuesday it was frustrated with the first day of mediation, which it said Boeing was not taking seriously.
The union has been pushing for a 40 per cent raise over four years in its first full contract negotiations with Boeing in 16 years, well above the planemaker’s offer of 25 per cent, which was resoundingly rejected.
Brian Bryant, the IAM’s international president, said actions like furloughs and the cutback in salaries amounted to “smoke and mirrors”, given earlier company spending on bonuses and compensation for top executives.
