Boeing strike enters its fifth week, US Secretary of Labor intervenes in negotiations
Boeing's strike has entered its fifth week, affecting 33,000 workers. Acting Secretary of Labor Su Zifeng of the United States is assisting Boeing in negotiations with the International Association of Machinists and Aerospace Workers (IAM). The strike has led to the closure of assembly lines for the 767, 777, and 737 Max, with workers demanding higher wages and improved retirement benefits. Boeing plans to lay off 10% of its workforce and has reached a $10 billion credit agreement with multiple banks. Boeing's stock price has fallen by about 40% this year
According to the financial news app Zhitong Finance, Julie Su, the Acting Secretary of the U.S. Department of Labor, is in Seattle assisting Boeing (BA.US) and the International Association of Machinists and Aerospace Workers (IAM) in resolving a five-week-long strike affecting 33,000 workers. IAM stated that both parties are actively engaged in indirect negotiations facilitated by the U.S. Department of Labor. Julie Su has met with the union and Boeing's CEO, Kelly Ortberg, and has communicated with both sides multiple times. This dispute has garnered widespread attention in Washington, especially on the eve of the U.S. presidential election. Democratic lawmakers have also expressed support for the striking workers.
IAM District 751 emphasized its commitment to seeking a fair resolution and is fully engaged in the negotiations. Boeing has not commented on the matter. As the strike continues, the pressure on Boeing, its suppliers, and workers continues to mount, especially since the formal negotiations broke down over a week ago. The strike has led Boeing to shut down the 767, 777, and 737 Max assembly lines, impacting operations on the West Coast.
This is Boeing's first large-scale labor dispute in 16 years, with workers demanding wage increases and improved retirement benefits. They are dissatisfied with slow wage growth over the past decade while executives have received generous rewards. Boeing is moving forward with a plan to cut 10% of its workforce as the first step in a broader business restructuring under Ortberg's leadership. The supply chain is also affected, with Spirit AeroSystems Holdings Inc. announcing temporary layoffs for 700 workers.
In response, Boeing has taken measures to raise up to $25 billion over the next three years to support its operations and maintain its investment-grade credit rating. Boeing's stock price has fallen by about 40% this year, making it the second-worst performer in the Dow Jones Industrial Average. Additionally, the company has reached a $10 billion supplemental credit agreement with several U.S. banks and may raise funds through issuing new shares or debt to withstand the strike and overcome operational challenges.
Regulatory filings indicate that Boeing may strengthen its financial position over the next three years through fundraising and new loan agreements with lenders. Since the beginning of 2019, Boeing has incurred losses exceeding $25 billion. As the strike enters its second month, the company's finances face new pressures, having consumed over $1 billion in cash, with remaining cash and securities totaling $10.3 billion as of September