Boeing Strike: Workers Reject New Offer
- Members of the International Association of Machinists and Aerospace Workers (IAM) began a strike against Boeing on August 4, 2023, after rejecting the company's contract offer and approving...
- The IAM estimates its proposed contract would increase costs by approximately $50 million over four years, compared to Boeing's rejected offer.
- Analysts at Reuters reported on October 24, 2023, that the 777X charge could be significant, further compounding Boeing's financial challenges.
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Boeing Strike continues as contract Dispute Deepens, Delivery Delays Mount
Table of Contents
Updated October 26, 2023 at 18:28:07 PST
Strike Overview
Members of the International Association of Machinists and Aerospace Workers (IAM) began a strike against Boeing on August 4, 2023, after rejecting the company’s contract offer and approving their union’s proposed four-year agreement. Boeing management, however, has refused to consider the IAM’s offer.
Financial Implications and Executive Compensation
The IAM estimates its proposed contract would increase costs by approximately $50 million over four years, compared to Boeing’s rejected offer. This figure is considerably less than the $22 million expected to be earned by Boeing CEO Kelly Ortberg in 2023.Boeing is anticipating a multi-billion dollar charge on its 777X program in its upcoming third-quarter earnings report, due to the program being six years behind schedule and lacking regulatory certification.
Analysts at Reuters reported on October 24, 2023, that the 777X charge could be significant, further compounding Boeing’s financial challenges.
Impact on Deliveries and National Security
Despite Boeing officials’ claims that a “mitigation plan” has minimized the strike’s impact, deliveries of F-15EX fighter jets to the U.S.Air Force have been delayed. General Kenneth Wilsbach, nominee for Air Force chief of Staff, informed the Senate Armed Services Committee of these delays in comments submitted for his October 9, 2023, nomination hearing. Air & Space Forces Magazine detailed the impact on the F-15EX program on October 11,2023.
Union Response
IAM International President Robert Bryant criticized Boeing’s approach, stating, “It’s well past time for Boeing to stop cheaping out on the workers who make its success possible and bargain a fair deal that respects their skill and sacrifice.”
Boeing’s Financial Outlook
Boeing is expected to report another unprofitable quarter when it releases its third-quarter results on Wednesday, October 25, 2023. The anticipated charge related to the 777X program adds to concerns about the company’s financial stability. The 777X, designed to compete with the Airbus A787, has faced numerous engineering and certification hurdles. the Seattle Times provided detailed coverage of the 777X issues on October 24, 2023.