Boeing workers go on strike and halt production of key company models ðŸ“Ē

19:20 13 āļāļąāļ™āļĒāļēāļĒāļ™ 2024

Boeing (BA.US) workers have rejected the company's proposed contract and voted overwhelmingly to go on strike. The workers' decision will halt production of most of the company's aircraft, including its best-selling 737 MAX model. 

Boeing and the International Association of Machinists and Aerospace Workers (IAM) unveiled a draft contract last Sunday, under which the company offered workers, among other things, a 25% wage increase over the next four years and improvements in health care-related fees and pension benefits. However, union members considered the contract insufficient in view of the rising cost of living and rejected the proposed solution. Approximately 96% of IAM members voted in favor of the strike, far exceeding the required two-thirds ceiling, and as of midnight, workers at Seattle factories walked off the job. 

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The strike comes in a very unfavorable environment for Boeing, which is facing image problems and turbulence in its production process after an emergency door failure on an Alaska Air Lines flight in January, leading first to the grounding of all 737-9 MAX models and to increased FAA audits and a series of subsequent instances of aircraft production quality problems. As a result, the FAA imposed production restrictions on Boeing in order for the company to make appropriate changes leading to the resolution of errors and problems with the production process. 

According to preliminary estimates, the 30-day protest could cost $1.5 billion and thus affect an even bigger problem with the production of key aircraft models, including the best-selling 737 Max aircraft. 

Boeing's stock is down nearly 5% in pre-opening trade, implying the lowest value of the shares since November 2022. Source: xStation

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