Boeing Shares in Turbulence Amid Strike Resolution Talks and Financial Strain

Boeing Co. appears to be nearing a resolution of the long-standing strike that has disrupted production and affected the supply chain. The aerospace giant and the International Association of Machinists (IAM) have reached a new contract proposal, which offers attractive terms, including a 38% wage increase over four years and a $12,000 ratification bonus.

The union, representing thousands of striking Boeing workers, will vote on the proposal on November 4th. The outcome of the vote, however, remains uncertain as union members previously rejected two prior offers from Boeing. Members have consistently demanded a 40% wage increase and the reinstatement of previous pension plans.

The labor strike, which began on September 13 with significant union backing, has forced the cessation of production for key aircraft models such as the 737 MAX and has led to broader impacts across Boeing's supply chain. Suppliers have faced operational strains, with some resorting to furloughs due to halted orders and delayed deliveries.

Financially, the strike has been costly for Boeing. In its latest financial report, Boeing recorded a net loss of $6.174 billion for the third quarter. The strike has also compounded Boeing's existing debt pressures, and to bolster liquidity, the company recently raised $21 billion through a stock issuance.

In the meantime, Boeing is exploring strategic options, potentially including the sale or restructuring of its space division, as it seeks to stabilize its operations and financial outlook. The aerospace company is also preparing for significant workforce restructuring, having announced a 10% global staff reduction earlier this month.

The resolution of the strike is critical as Boeing seeks to regain its production rhythm and rebuild investor confidence. The proposed new contract could potentially enhance employee satisfaction and bring about a more stable production environment. However, Boeing still faces potential financial challenges and risks that could affect its credit rating if operational disruptions continue.