Union members hold picket signs during a press conference following the count of the union contract vote at the main union hall of IAM District 751, Thursday, September 12, 2024, in Seattle, Washington, USA.
M. Scott Brauer Bloomberg | Getty Images
boeing company Finance Chief Brian West said the strike, which began after midnight on Friday, would hurt aircraft deliveries and “jeopardize” the company’s recovery, hours after factory workers overwhelmingly rejected a new labor contract and went on strike.
West said the financial impact of the strike would depend on how long it lasted, but it would affect production of the company’s best-selling planes, including the cash-cow 737 Max, built in Renton, Washington.
“The strike will impact production and deliveries as well as our operations and will jeopardize our recovery,” West said at a Morgan Stanley conference on Friday. “So our focus right now is to be laser-like focused on cash-saving actions, and we will be.”
Workers at the Boeing plant gather on a picket line near the entrance to the production facility on the first day of the strike in Renton, Washington, USA, September 13, 2024.
Matt Mills McKnight | Matt Mills McKnight Reuters
He said Boeing’s top priority is to get back to the negotiating table and “reach a deal that’s good for our people, their families and our communities.”
Moody’s has put all of Boeing’s credit ratings on review for downgrades, and Fitch Ratings said a prolonged strike could put Boeing at risk of a downgrade, a move that could push up the manufacturer’s borrowing costs, causing Boeing’s shares to fall sharply on Friday. debt.
Boeing shares closed down nearly 4% on Friday.
West declined to say whether the company could hit its monthly production target of 38,737 Max planes by the end of the year.
Jefferies aerospace analyst Sheila Kahyaoglu previously estimated that a 30-day strike could cost Boeing $1.5 billion.
Boeing’s current focus will be on “taking action to conserve cash,” West said, adding that new CEO Kelly Ortberg would work to restore relations with unions.
Boeing and the International Association of Machinists and Aerospace Workers announced a tentative labor deal on Sunday that includes a 25% wage increase over four years and other improvements to health care and retirement benefits. But workers have been seeking a 40 per cent pay rise, arguing it would not be enough to cover the increased cost of living.
Workers in the Seattle area and Oregon voted 94.6% against the proposal and 96% in favor of a strike.
They got off work after midnight on Friday.
Boeing mechanics last went on strike in 2008, with the work stoppage lasting nearly two months.
Production disruptions are possible as manufacturers face a range of issues. The company has been working to increase production and restore its reputation following the security crisis.
In January, the Federal Aviation Administration (FAA) banned Boeing from increasing production of Max aircraft after a door jam burst on a nearly new Boeing 737 Max 9 aircraft. The FAA stepped up inspections of production plants. Inspections are made until the regulatory agency is satisfied with its safety and quality procedures.
An FAA spokesman told CNBC on Friday that the agency will keep inspectors at Boeing plants during the strike.
