Boeing’s new collective bargaining offer has been submitted, but was rejected by the American aircraft manufacturer’s employees. They therefore continued their strike, which lasted more than five weeks. Supplier Spirit AeroSystems is finding it increasingly difficult due to the strike.
In a vote, 64 percent of union members rejected the company’s proposal to increase wages by 35 percent over four years, the International Union of Aircraft Mechanics and Workers (IAMAW) said on Wednesday.
40 percent more wages were demanded
“After ten years of sacrifices, we still have some catching up to do and we hope to do so quickly by resuming negotiations,” the union said in a statement. 40 percent more wages are needed. More than 30,000 workers at Boeing factories have gone on strike since September 13, paralyzing production of key aircraft models such as the 737 MAX.
The previous bid was rejected by 95 percent of voters last month and led to a work stoppage.
Financial problems at Spirit Aero
Meanwhile, Boeing’s main supplier, Spirit AeroSystems, is increasingly experiencing financial problems as a result of the ongoing strike at Boeing. Spirit Aero posted a net loss of $217 million (€201.54 million) in the third quarter and had to draw on its full $350 million credit facility, the company announced on Wednesday.
The company did not receive the expected $425 million in upfront payments from Boeing after the July MoU. Cash reserves have therefore shrunk to just $218 million. Spirit shares fell four percent in after-hours trading after the results were announced. Boeing initially did not comment when asked.
Spirit puts enormous pressure on employees
Spirit blamed the Boeing factory workers’ strike for its deteriorating financial situation. The company announced it would put 700 employees on forced leave for 21 days and warned of possible layoffs if the strike at Boeing continued. Shortly after the announcement, workers at the American aircraft manufacturer rejected a new wage offer on Wednesday and continued their strike. An agreement between Boeing and the union is currently not in sight.
Despite the tense situation, Spirit reiterated that the planned acquisition by Boeing should be completed by mid-2025. There are “no changes” to the planned acquisition and integration of Spirit, Boeing CEO Kelly Ortberg said in a conference call on Wednesday. Boeing agreed in July to buy back the supplier, which was spun off in 2005, for 4.7 billion dollars (4.37 billion euros) in shares.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
