Boeing Faces US$50 Million Daily Loss Amid Ongoing Strike

Boeing is facing operational challenges as a strike by machinists continues, costing the company an estimated US$50 million per day in lost revenue and ongoing expenses, according to Bank of America analyst Ron Epstein. This situation intensifies amid Boeing's troubled financial landscape, highlighted by a recent quarterly cash outflow of US$4.3 billion.

As the International Association of Machinists and Aerospace Workers (IAM) and Boeing engage in negotiations, the impact of the strike is becoming pronounced. Fortune reported that production has halted on key models, including the 737 MAX, 767, and 777/777X, which together represent 87% of Boeing's delivery backlog. 

Epstein expressed surprise at the current state of negotiations, noting that his team anticipated a relatively quick resolution to the IAM's demands for a 40% wage increase. However, a recent union vote rejected a contract offer featuring a 25% increase, indicating rifts between the two parties. Boeing's subsequent proposal of a 30% increase has been labeled by the union as "a blatant show of disrespect," further complicating the path to an agreement, as previously reported by MBN.

Epstein cautioned that if the work stoppage extends beyond a month, the potential for more significant disruptions increases, placing further pressure on the company's operations. The IAM's demands could translate to over US$1 billion in additional annual costs for Boeing, a figure that could hinder its recovery if not addressed.