Boeing Machinists voted against a brand new labor contract that may provide 35% wage increases over 4 years, their union said Wednesday, extending a greater than five-week strike that has halted many of the company's aircraft production, which is concentrated within the Seattle area brought.
The rejection of the contract by 64% of voters is one other major setback for the corporate, which warned Wednesday that it is going to proceed to burn money through 2025 and reported a quarterly lack of $6 billion, its biggest since 2020. For that An easy majority was required for the contract to pass.
According to S&P Global Ratings, the strike is costing the corporate about $1 billion a month and jeopardizing Boeing's investment-grade credit standing, which could drive up borrowing costs at the identical time the corporate is trying to boost money.
New CEO Kelly Ortberg had said reaching an agreement with machinists was a priority to get the corporate back on target after years of safety and quality problems.
“My focus is on getting everyone moving forward, getting them back to work and improving that relationship,” Ortberg told CNBC's “Squawk on the Street” earlier within the day when asked in regards to the strike.
Ortberg has laid out his vision for Boeing's future, which could include streamlining the corporate to give attention to its core business. Earlier this month, he announced that Boeing would cut 10% of its 170,000 global workforce.
Boeing's greater than 32,000 machinists within the Puget Sound area, Oregon and other locations walked off the job Sept. 13 after overwhelmingly voting against an earlier tentative agreement that included 25% pay raises. The International Association of Machinists and Aerospace Workers union had originally called for a 40% wage increase. It is the primary strike by machinists since 2008.
The latest proposal, announced last Saturday, included a 35% raise over 4 years, a rise in 401(k) contributions, a $7,000 bonus and other improvements.
Given the rising cost of living within the Puget Sound region, staff had pushed for higher wages. Some machinists were upset about losing their pension advantages in a previous contract they signed in 2014, but the most recent proposal didn’t include a pension.
“Rejection increases the risk of a prolonged strike if the obstacle is pension reinstatement,” Ben Tsocanos, aerospace director at S&P Global Ratings, said in an announcement. He added that the corporate was unlikely to conform to an annuity due to the price.
In the brand new contract, Boeing had also agreed to construct its next plane within the Pacific Northwest, which also became a degree of contention amongst union staff after Boeing moved all 787 Dreamliner production to a non-union factory in South Carolina .
“We have made tremendous progress with this agreement. However, we have not accomplished enough to meet the demands of our members,” Jon Holden, president of IAM District 751, said at a news conference Wednesday evening. He said the union would push to return to the bargaining table.
Boeing declined to comment on the voting results.
The labor dispute is the most recent in a protracted list of problems at Boeing that began the yr when a door plug flew out in mid-air from a crowded Boeing 737 Max 9, its best-selling plane, drawing renewed scrutiny from regulators over the corporate.
The strike began as Boeing worked to ramp up production of the 737 and other aircraft.
The prolonged shutdown also poses a challenge for the aerospace supply chain, which is fragile within the wake of the pandemic as the corporate's supplier network has needed to quickly train latest staff.
Spirit AeroSystems Last week, the corporate announced that about 700 staff can be temporarily furloughed and that layoffs or other furloughs can be possible if the Boeing engineering strike continued.
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