Boeing’s financial woes are deepening as the company struggles to cope with the prolonged strike by the International Association of Machinists and Aerospace Workers. The union, which represents 33,000 employees, has been on strike for over a month, costing Boeing around $1 billion each month.
The strike is having a significant impact on Boeing’s operations, with production delays and a financial burden that is already affecting the company’s bottom line. In July, Boeing acquired Spirit AeroSystems and took on its debt, while also facing criticism over safety issues. The company’s customers, who were expecting deliveries of planes via the 777X program, will now have to wait until 2026.
To mitigate the financial impact, Boeing’s CEO Kelly Ortberg has announced plans to cut 10% of the company’s global workforce, affecting around 17,000 jobs. This move is part of a broader effort to restore the company’s competitiveness and deliver for its customers in the long term.
The strike is also a result of a disagreement over wages and benefits. Boeing’s latest offer to the union, which included a 30% raise and a restoration of its performance bonus, was rejected last week. The union is seeking a 40% raise, as well as improvements to vacation and sick leave accrual, progression, ratification bonus, and a 401(k) match.
The dispute between Boeing and the union has been ongoing, with the company facing criticism over its handling of the situation. In July, Boeing was audited by the Federal Aviation Administration, which found that the company had “failed to comply with manufacturing quality control requirements” in more than one instance. This criticism has added to the company’s woes, and it remains to be seen how it will navigate the current environment.
Boeing’s financial situation is precarious, and the company is facing significant challenges in the coming months. The strike will continue to affect production and the company’s bottom line, while the planned job cuts will have a significant impact on employees. The dispute between Boeing and the union is unlikely to be resolved anytime soon, and it remains to be seen how the company will emerge from this difficult period.
