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regular-article-logo Friday, 25 October 2024

Boeing shares fall 2.7 per cent in US pre-market trading, as workers reject latest contract offer

Offer includes 35 per cent general wage increase over four years but no defined benefit pension plan, which was one of the striking machinists’ main demands

Reuters Bangalore/Paris Published 25.10.24, 09:58 AM
Workers protesting

Workers protesting File picture

Boeing shares fell 2.7 per cent in US pre-market trading on Thursday after workers voted to extend a nearly six-week-old strike, throwing fresh uncertainty over the company’s efforts to stabilise finances and restore its battered image.

Some 64 per cent of US West Coast factory workers on Wednesday rejected the company’s latest contract offer, leaving assembly lines idle for nearly all the planemaker’s commercial jets including the 737 MAX, the backbone of its balance sheet.

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The offer included a 35 per cent general wage increase over four years but no defined benefit pension plan, which was one of the striking machinists’ main demands.

The rejection is a blow for new CEO Kelly Ortberg, who took the top job in August on a pledge to work more closely with factory workers than his predecessors, and leaves the company with dwindling options as it continues to bleed cash.

“Boeing is going to have to settle it and just make a higher offer because they are just not in a position to duke it out,” said Agency Partners analyst Nick Cunningham.

Analysts said the vote could influence efforts to carry out a re-financing needed to stabilise its operations after the strike hampered its recovery from a string of previous crises.

Many suppliers are also facing financial difficulties.

Boeing last week filed papers giving itself a window to raise as much as $25 billion to avoid losing its investment grade rating and separately secured a $10 billion credit.

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