Key Points
- Boeing and the union restarted contract talks, mediated by federal officials.
- The union seeks a 40% wage increase, while Boeing offers 25%.
- A prolonged strike could cost Boeing billions and lead to a credit downgrade.
- The strike has stopped production of Boeing’s 737 MAX, 777, and 767 models.
Boeing and its largest union, the International Association of Machinists and Aerospace Workers (IAM), are set to resume contract negotiations on Wednesday, mediated by federal officials, after failing to agree on key issues like wages and pensions. The talks came as the union’s 30,000 members continued their strike, which began last Friday after a 96% vote in favor of the action.
The union is pushing for a 40% wage increase over four years, far above Boeing’s offer of 25%, which the workers overwhelmingly rejected. The strike marks Boeing’s first since 2008. It has already brought production of key models, including the 737 MAX, 777, and 767, to a halt, delaying airline deliveries and threatening the company’s financial stability.
In a statement following mediation talks on Tuesday, the IAM expressed frustration with Boeing’s approach, accusing the company of not taking the mediation process seriously. “We are fighting for what is right and just – for what we have earned over the past 16 years,” the union said on X (formerly Twitter).
On its sixth day, the strike could have significant financial consequences for Boeing. Analysts estimate that a prolonged strike may cost the company billions, further burdening its debt-laden balance sheet, which carries $60 billion in liabilities. There are also concerns that Boeing’s credit rating could be downgraded if the strike continues for an extended period.
In response to the financial strain, Boeing announced on Monday that it was freezing hiring and considering temporary layoffs to reduce costs. Additionally, the company has stopped placing most orders for parts across its jet programs, except for the 787 Dreamliner, which is expected to hurt suppliers.
As negotiations continue, it remains unclear how long the strike will last or when production might resume. Still, both sides are pressured to reach an agreement soon to minimize the financial impact on Boeing and its workforce.
