Julie Su, acting US labor secretary, is in Seattle to help Boeing (BA.US) and the International Association of Machinists and Aerospace Workers (IAM) resolve a five-week strike that has affected 33,000 workers. IAM said both sides were actively engaged in mediated talks facilitated by the US Labor Department. Ms Su has met with the union and Boeing chief executive Dave Calhoun and has been in communication with both sides multiple times. The dispute has garnered significant attention in Washington DC, especially ahead of the US presidential election. Democratic lawmakers have also expressed support for striking workers.
IAM District 751 has highlighted its commitment to seeking a fair solution and is fully engaged in negotiations. Boeing has not commented. As the strike continues, pressure on Boeing and its suppliers and workers mounts, especially since formal talks broke down more than a week ago. The strike has led to the closure of Boeing’s 767, 777 and 737 Max assembly lines, affecting operations on the west coast.
It is Boeing’s first major labour dispute in 16 years, with workers demanding higher wages and improved retirement benefits. They are unhappy about slow wage growth over the past decade while executives have been well rewarded. Boeing is pushing a plan to cut 10 per cent of its workforce as the first step in a broader business restructuring under Mr Calhoun. The supply chain has also been affected, with Spirit AeroSystems Holdings Inc announcing it would temporarily lay off 700 workers.
The company has taken steps to raise up to $25bn over the next three years to support its operations and maintain its investment-grade credit rating. Boeing shares have fallen about 40 per cent this year, making it the second worst performing stock in the Dow Jones industrial average. In addition, the company has reached a $10bn supplemental credit agreement with several US banks and may raise more money through a share or debt offering to weather the strike and overcome operating setbacks.
Regulatory filings show Boeing may solidify its financial position through raising funds and new borrowing agreements with lenders over the next three years. The strike, which has entered its second month, has added new pressure on the company’s finances, which have already consumed more than $1bn in cash and had $10.3bn in total cash and securities as of September, after losing more than $25bn since the beginning of 2019.