Boeing Chief Financial Officer Brian West said the strike, which began shortly after midnight on Friday, would impact aircraft deliveries and “jeopardize” the corporate's recovery, just hours after factory staff overwhelmingly rejected a brand new collective agreement and walked off the job.
West said the financial impact of the strike would depend upon its duration, however it would affect production of the corporate's best-selling planes, including the best-selling money cow 737 Max, which is produced in Renton, Washington.
“The strike will impact production, deliveries and our operations and will jeopardize our recovery,” West said at a Morgan Stanley conference on Friday. “So our immediate focus is on cash conservation measures, and that's what we're going to do.”
He said Boeing's priority is to return to the negotiating table and “reach an agreement that is good for our people, their families and our community.”
Boeing shares fell sharply on Friday after Moody's considered downgrading all of Boeing's credit rankings and Fitch Ratings said a protracted strike could expose Boeing to a downgrade, actions that might further increase the already indebted company's borrowing costs.
Boeing shares closed nearly 4 percent lower on Friday.
West declined to comment on whether the corporate could reach the production rate of 38 737 Max aircraft per 30 days by the tip of the 12 months.
Jefferies aerospace analyst Sheila Kahyaoglu had previously estimated that a 30-day strike could cost Boeing $1.5 billion.
West said Boeing would initially give attention to “cash conservation measures,” adding that latest CEO Kelly Ortberg would work to revive relations with the union.
Boeing and the International Association of Machinists and Aerospace Workers unveiled a tentative collective bargaining agreement on Sunday that calls for wage increases of 25 percent over 4 years and other improvements in health and pension advantages. But staff had demanded a 40 percent increase, arguing that it might not cover the increased cost of living.
94.6% of staff within the Seattle area and Oregon rejected the proposal and 96% favored a strike.
They stopped working after midnight on Friday.
The last strike by Boeing engineers took place in 2008 and lasted almost two months.
The potential production disruption comes because the manufacturer faces a series of problems because it struggles to ramp up production and restore its repute following safety crises.
A blown door stopper on an almost latest Boeing 737 Max 9 in January prompted the Federal Aviation Administration (FAA) to ban Boeing from increasing production of its Max planes and ordered it to extend inspections at manufacturing plants until the regulator is satisfied with safety and quality procedures there.
An FAA spokeswoman told CNBC on Friday that the agency would keep its inspectors at Boeing facilities through the strike.
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