RENTON, Wash. \u2014 Cash-strapped\u00a0Boeing\u00a0is facing mounting costs from an ongoing\u00a0machinist strike\u00a0as workers push for higher pay. A failure to get a deal done could be even more expensive.<\/p>\n
In the shadow of a factory outside Seattle where Boeing makes its best-selling planes, picketing Boeing machinists told CNBC they have saved up money and have taken or are considering taking side jobs in landscaping, furniture moving or warehouse work to make ends meet if the strike is goes on much longer.<\/p>\n
The work stoppage by Boeing\u2019s factory workers in the Pacific Northwest just entered its second week. The financial cost of the strike on Boeing depends on how long it lasts, though ratings agencies have warned that the company could\u00a0face a downgrade\u00a0if it drags on too long.<\/p>\n
That would add to the borrowing costs of the company, already $60 billion in debt. Boeing has\u00a0burned through about $8 billion\u00a0so far this year in the wake of a near-catastrophic door plug blowout from one of its 737 Max planes in January.<\/p>\n
Boeing hasn\u2019t turned an annual profit since 2018, and its\u00a0new CEO Kelly Ortberg\u00a0is trying to\u00a0restore the company\u2019s reputation\u00a0after months of manufacturing crises that have slowed deliveries to customers, depriving it of cash.<\/p>\n
At the local union office in Renton, machinists were preparing for what may become a lengthy strike: Union members carried in large pallets of bottled water, while someone mixed a giant tuna salad in the kitchen to make sandwiches for workers. Union vans visited demonstration sites around Renton offering transportation to bathroom breaks for workers on picket duty. Burn barrels provided heat for chilly overnight pickets.<\/p>\n
Many workers spoke of their love for their jobs but fretted about the high cost of living in the Seattle area, where the majority of Boeing\u2019s aircraft are made.<\/p>\n
The median home price in Washington state increased about 142% to $613,000 as of 2023, from $253,800 a decade earlier, according to the state\u2019s Office of Financial Management. That outpaces the roughly 55% increase nationally over that period, according to data from the Federal Reserve Bank of St. Louis.<\/p>\n
\u201cWe can\u2019t afford [to own] a home,\u201d said Jake Meyer, a Boeing mechanic who said he will start driving for a food delivery service during the strike and is looking at picking up odd jobs such as moving furniture. Meyer said although he\u2019s striking for higher pay from Boeing, he enjoys the job of building airplanes.<\/p>\n
\u201cI take pride in my work,\u201d he said.<\/p>\n
Another Boeing machinist said he has been saving for months, forgoing things such as restaurants and paying three months of mortgage payments early.<\/p>\n
\u201cI can last as long as it takes,\u201d said the worker, who spoke on the condition of anonymity.<\/p>\n
More than 30,000 Boeing machinists walked off the job at midnight Sept. 13 after turning down a tentative labor deal in a nearly 95% vote \u2014 96% voted in favor of a strike. They received their last paychecks Thursday, and health benefits are set to end on Sept. 30. A strike fund from the union will soon give them $250 a week.<\/p>\n
The strike is costing Boeing some $50 million a day, according to estimates by Bank of America aerospace analyst Ron Epstein. The strike halted production of most of Boeing\u2019s aircraft, and that is rippling out to the aerospace giant\u2019s vast network of suppliers, some of which have already been told to halt shipments. Boeing is still making 787 Dreamliners at its non-union factory in South Carolina.<\/p>\n
The battle pits a struggling Boeing against a workforce seeking wage increases and other improvements. Boeing\u2019s most recent offer included 25% general wage increases over a four-year deal and was endorsed by the machinists union, the International Association of Machinists and Aerospace Workers District 751.<\/p>\n
Workers said they were looking for wage increases closer to the 40% that the union had proposed as well as annual bonuses and a restoration of pensions lost more than a decade ago.<\/p>\n
Boeing and the union were at the negotiation table this week, but both Boeing and union negotiators have said they were disappointed with the lack of progress.<\/p>\n
\u201cWe continue to prioritize the issues you defined in the most recent survey,\u201d union negotiators wrote to members Wednesday, \u201cyet we are deeply concerned that the company has not addressed your top concerns. No meaningful progress was made during today\u2019s talks.\u201d<\/p>\n
Ortberg, who is just six weeks on the job, announced\u00a0temporary furloughs\u00a0this week of tens of thousands of Boeing staff, including managers and executives, on the heels of a\u00a0hiring freeze\u00a0and other cost-cutting measures announced this week.<\/p>\n
\u201cDuring mediation with the union this week, we continued our good faith efforts to engage the union\u2019s bargaining committee in meaningful negotiations to address the feedback we\u2019ve heard from our team,\u201d Ortberg said in a note to staff Friday.<\/p>\n
\u201cWhile we are disappointed the discussions didn\u2019t lead to more progress, we remain very committed to reaching an agreement as soon as possible that recognizes the hard work of our employees and ends the work stoppage in the Pacific Northwest,\u201d Ortberg wrote.\u00a0<\/p>\n
The strike, which includes Boeing machinists in the Seattle area, Oregon and a few other locations, is just the latest in a series of\u00a0labor battles\u00a0in recent years that has included actors, autoworkers, port workers and airline employees, all of which have won raises after strikes or strike threats.<\/p>\n
The Biden administration has encouraged Boeing and the union to reach a deal.<\/p>\n
\u201cI do believe that both parties want to get to a resolution here, and hoping to see one that makes sense for the\u00a0workers\u00a0and it works for a company that really needs to find its way forward on so many fronts,\u201d Transportation Secretary Pete Buttigieg told CNBC\u2019s \u201cSquawk Box\u201d on Thursday.<\/p>\n
Boeing is facing a tight labor market. During the last strike, in 2008, which lasted less than two months, the company was in better financial shape, and there was less job competition in the area.<\/p>\n
One Boeing supplier told CNBC that furloughing or laying off workers would cause problems for months down the road because it takes so long to train staff on such technical and detailed work.<\/p>\n
During the pandemic, Boeing and its suppliers shed thousands of workers. They\u2019ve since struggled to hire and train workers in time for the resurgence in air travel and aircraft demand.<\/p>\n
\u201cYou\u2019re in an environment where skilled, technical labor is hard to get right now, particularly in aerospace and defense,\u201d said Bank of America\u2019s Epstein. \u201cSo what do you do to not only retain them but attract them? If they really want a pension, maybe that gives you a competitive advantage over people who are trying to attract talent.\u201d<\/p>\n<\/p>\n
RENTON, Wash. \u2014 Cash-strapped\u00a0Boeing\u00a0is facing mounting costs from an ongoing\u00a0machinist strike\u00a0as workers push for higher pay. A failure to get a deal done could be even more expensive. In the shadow of a factory outside Seattle where Boeing makes its best-selling planes, picketing Boeing machinists told CNBC they have saved up money and have taken […]<\/p>\n","protected":false},"author":0,"featured_media":10026,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-10025","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/10025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=10025"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/10025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/10026"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=10025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=10025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=10025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}