Boeing, which is still mired in an investigation into the 737 Max, is facing internal problems, with the company's largest guild demanding a 40 percent pay rise over three to four years and threatening to consider a strike.
* The labor dispute has been brewing for 10 years. The International Association of Machinists and Aerospace Workers (IAM), Boeing's largest union, has long been haunted by a 2014 collective bargaining agreement that sacrificed pensions, locked in minimum wage increases and tied labor activists.
Buoyed by the resurgence of the labor movement in the United States, the scarcity of qualified aerospace workers, and the pressure on jobs at Boeing's stable factories, union leaders will demand a 40 percent pay rise over three to four years. "Our goal is to negotiate a contract that is acceptable to both the union leadership and members," said Jon Holden, president of IAM Region 751, which represents 32,000 Seattle-area Boeing mechanics. ”
Holden said in an interview that he saw a path to a deal with Boeing. But even so, he said he was ready to strike, following the example of Detroit's auto workers, Hollywood writers and actors, and Spirit Aerosystems Holdings Inc., a Kansas-based Boeing businessmanof fellow mechanics, each of these industries has seen significant improvements in wages and other collective contract terms after last year's strike.
If the strike begins, Boeing could shut down its factories in Washington and Oregon, including the assembly lines for its cash cow product, the 737 airliner, reducing production after the current IAM contract expires in September. Labor tensions will increase pressure on Boeing CEO Dave Calhoun, who is already facing pressure from regulators and investors over the quality of the 737 Max, as negotiations begin on March 8.
We will continue to focus on working with our team to improve the quality of our operations," Boeing said in a statement. "We believe there is a path to a new contract that addresses the needs and concerns of our employees while maintaining our competitiveness in the global market. ”
Boeing's stock price in the U.S. stock market on the 6th intraday **09% at 208$48. Boeing's share price has reached 21% this year, making it the worst performer among Dow constituents.
* Boeing has no new aircraft to use as bargaining chips in preparation for upcoming talks, and the company cannot threaten to shift production to the southern United States as unemployment nears historic lows, analysts argue. Boeing is struggling to stabilize its factories and factories and return to stable and reliable production, which the company cannot afford to lose.
Analysts say unions have the upper hand and now is the time for unions to reach the deal that is most beneficial to them, and unions will be very active. While Boeing sticks to its goal of achieving $10 billion in free cash flow by 2025 or 2026, the company last week declined to provide a financial outlook for the year, a goal that is at risk of being undermined by the recent Boeing scandal.
There are also analysts who say that collective bargaining agreements can also be costly, without considering the impact of ** and production efficiency, and that every 10% increase in mechanic wages will reduce free cash flow by about 2 percent in 2026$600 million.
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