Boeing strike drags on with no talks scheduled amid wage dispute

US plane maker blames union's 'lack of consideration' of workers' demands as strike enters fourth week

Striking Boeing factory workers gather on a picket line outside the production plant in Renton. Reuters

Talks between the US plane maker Boeing and its primary manufacturing union have stalled, putting further strain on the company's finances as it grapples with delayed production and widening losses.

With no further discussions scheduled, the costly strike, which started on September 13, has now entered its fourth week.

“Unfortunately, the union didn’t seriously consider our proposals … instead, the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business,” Stephanie Pope, president and chief executive for Boeing’s commercial plane unit, said in an internal memo circulating on social media on Wednesday.

"Further negotiations do not make sense at this point," she added.

The Virginia-based company said it has retracted its pay offer to nearly 33,000 US factory workers, blaming what it calls the union's lack of serious consideration of its proposals.

Boeing concluded its third round of bargaining with a federal mediator, which included two days of negotiations this week.

"Our team bargained in good faith and made new and improved proposals to try to reach a compromise, including increases in take-home pay and retirement," Ms Pope said.

Boeing workers are demanding incraesed wages and better pension plans. Bloomberg

Seattle-based International Association of Machinists (IAM), which represents more than 33,000 workers, said Boeing was “hellbent” on the non-negotiated offer that was sent directly to the media on September 23.

“They refused to propose any wage increases, vacation/sick leave accrual, progression, ratification bonus … by refusing to bargain the offer sent to the media, the company made it harder to reach an agreement,” IAM said.

“Boeing has now withdrawn its September 23 offer … when we surveyed our members on that offer … those who participated said it was not good enough. Boeing may have started this fight but the machinists will finish it."

IAM said it would work on another survey next week to re-evaluate its members’ priorities.

Represented by IAM, Boeing employees are on strike demanding various benefits, including a 40 per cent wage increase over three years, better retirement plans and improved healthcare coverage.

Boeing had offered a 30 per cent wage increase over four years and bonuses but the union rejected this offer.

S&P analysts estimate the strike will cost Boeing about $1 billion a month, Reuters reported. The company’s plan to boost the production of its 737 Max aircraft to 38 units per month is not likely to be achieved before mid-2025, it added.

The company, which is expected to announce its last-quarter earnings on October 23, was trading 2.97 per cent down at $150.05 a share at 7.10pm UAE time. The stock is down 40.40 per cent since the start of the year.

On Tuesday, the company said it had delivered 291 commercial aircraft this year, as of September 30, including 229 units of the 737 Max jet.

Boeing is also dealing with a series of crises related to the safety of its aircraft and its manufacturing process.

The Federal Aviation Administration issued a safety alert to airlines on Tuesday, warning of potential risks related to restricted or jammed rudder movement on certain Boeing 737s.

The company has been burning cash reserves as it faced challenges recovering from a mid-air panel failure in January on one of its new planes. This incident highlighted deficiencies in safety protocols and prompted US regulators to restrict its production output. In August, the company said it was planning to introduce design modifications to prevent incidents such as mid-air cabin panel blowouts.

Boeing 737 Max planes are assembled at the company’s plant in Renton, the US state of Washington. Reuters

It reported a net loss of $1.4 billion between April and June, compared to a loss of $149 million in the same quarter last year. The company racked up debt of $57.9 billion at the end of June quarter, due to the issuance of new debt.

The company also had a management shake-up in March amid heavy scrutiny from US regulators, with production scaled back as Boeing addressed safety and quality concerns.

In July, Boeing appointed aviation industry veteran and former Rockwell Collins boss Kelly Ortberg as its president and chief executive to turn around the troubled plane maker.