Boeing Workers Extend Strike After Rejecting Contract Offer

The ongoing strike by Boeing machinists has entered its second month, following the union’s rejection of the company’s latest contract offer. Boeing’s stock fell over 2% in pre-market trading Thursday in response.

The proposed contract included a 35% wage increase, up from Boeing’s previous 30% offer, but it still fell short of the union’s demand for a 40% raise. Additionally, Boeing’s proposal did not reinstate pension benefits for new employees, which were cut more than a decade ago, though it did include improvements for existing pension holders.

Boeing and the International Association of Machinists (IAM) had made preliminary progress over the weekend, with assistance from Acting Secretary of Labor Julie Su. Earlier, Boeing criticized the union’s approach, calling it not in “good faith,” before stepping away from negotiations.

Boeing CEO Kelly Ortberg said in a statement, “We have been working to find a solution that works for the company and meets our employees’ needs.” 

Since the two 737 Max crashes in 2018 and 2019, Boeing has been focused on restoring public trust and stabilizing financially. In January, a detached fuselage part mid-flight further impacted the company’s image. In response, the FAA imposed limits on production rates until Boeing strengthened its quality-control measures.

The strike has also slowed production on various models in Boeing’s backlog. According to Fitch Ratings, securing funding now partially hinges on resolving the machinist strike, with Boeing’s credit rating remaining precariously investment-grade.

The prolonged work stoppage poses a serious threat to Boeing’s financial stability. Fitch Ratings noted that Boeing’s recent cash-raising efforts have provided some liquidity support, but warned that ongoing labor disputes and production delays could put stability at risk. “Boeing's recent announcements enhance financial flexibility and address immediate liquidity concerns amid operational challenges and a protracted strike,” Fitch Ratings stated.