Boeing: We are ready to get back to the table and agree a deal
Boeing has declared that it is ready to return to negotiations with its worker to agree a pay deal.
In a statement issued after staff voted to strike, the company says:
The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.
We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement.
Key events
A late update, just for the record.
Boeing’s shares ended up falling 3.7% on the day, to finish at $156.77.
Closing post
Time to wrap up
Tens of thousands of Boeing workers have walked off the job early this morning after voting overwhelmingly to strike for higher pay, halting production of the planemaker’s strongest-selling jet as it wrestles with chronic output delays and mounting debt.
The company said on Friday it was ready to talk and “get back to the table to reach a new agreement” as striking workers picketed.
Newly installed Boeing CEO Kelly Ortberg had pleaded with workers not to go on strike – the first since 2008 – ahead of the vote, saying the action would put the company’s “recovery in jeopardy”.
About 33,000 workers in Boeing’s US Pacific north-west region late on Thursday voted down a tentative agreement reached between their union and the company that included a 25% pay increase over four years. They voted in favor of a strike beginning on Friday at midnight Pacific time (8am UK time), which will halt production of the 737 Max.
Boeing workers voted 94.6% to reject the agreement, and 96% in favor of striking.
News of the strike knocked Boeing’s shares down by 2% in early trading; they’ve since recovered slightly, and are down 0.9% at $161.41.
In other news…
The gold price has hit a new alltime high of $2,583.29 per ounce, as the US dollar weakens ahead of an expected cut to US interest rates next week.
Goldman Sachs have predicted that UK interest rates will have been slashed to 3% in a year’s time, down from 5% today.
Here are new photos from the picket line outside Boeing’s assembly plant in Renton this morning:
Airlines who have placed orders for Boeing’s 737 MAX jet will be watching the strike, and trying to anticipate if their deliveries will be delayed.
Reuters reports that Boeing has more than 4,700 of the jets on order, with Southwest Airlines, United Airlines, and Lion Air the top three customers awaiting deliveries, according to aviation data provider Cirium. More here.
Back on Wall Street, Boeing’s shares are recovering some of their earlier losses.
They’re still in the red, though; down 0.9% at $161.30.
CFM, who are the sole-source engine supplier for the 737 MAX, said there was no immediate impact to its operations from the Boeing strike, Reuters reports.
The strike at Boeing could send ripples through the US aerospace industry, knocking demand for the components used to build its planes.
JPMorgan said Boeing could adjust the pace at which it takes material.
Analyst Seth M. Seifman said:
“At a minimum, a prolonged strike could affect supplier growth expectations.”
Jungho Suh, a teaching assistant professor of management at the George Washington University School of Business, says:
“Boeing workers’ overwhelming vote to strike underscores a broader discontent within labor forces, despite offers of increased pay and benefits. It reflects a deeper struggle for dignity, equity, and sustainable work conditions in a high-stakes industry.
As negotiations unfold, Boeing’s stakeholders find themselves at a pivotal moment, grappling with the reality of how advanced technology is reshaping the workplace and prompting urgent questions about the future of work and equitable labor conditions in the age of artificial intelligence.”
Just in: US consumer confidence has picked up a little this month.
The latest consumer sentiment index, from the University of Michigan, has risen to 69.0 from 67.9 in August.
That’s a little higher than expected:
#US Michigan Consumer Sentiment for Sep preliminary is at 69.0, beating expectations (68) and up from August (67.9). Reflects improving consumer confidence as inflation cools and economic outlook steadies. #Economy #USA #Inflation #Market
— Equity Insights (@Fundamenta21972) September 13, 2024
After a choppy open, Boeing’s shares are down 2% at $159.55.
Boeing shares fall after staff vote for strike
Shares in Boeing have dropped at the start of trading in New York, as investor react to the strike action underway at its factories.
Boeing’s shares are down 1.5% in early trading, to $160.53, following last night’s news that staff had voted to reject a pay deal, and to go on strike.
They are the top faller on the Dow Jones industrial average this morning.
BOEING SHARES FALL 1.5% AFTER U.S. FACTORY WORKERS STRIKE, HALTING 737 MAX PRODUCTION$BA
— *Walter Bloomberg (@DeItaone) September 13, 2024
That takes their losses so far this year to over 38%.
White House press secretary Karine Jean Pierre has said the Biden administration was in touch with both sides in the Boeing pay dispute.
She says:
“We are going to encourage both parties to negotiate in that way, in good faith and reaching a strong contract.”
Bloomberg Intelligence analyst George Ferguson predicts Boeing will “soon” make a better offer to its employees, to end the strike and get them back to work.
$BA “needs the workers right now more than the workers need Boeing,” Bloomberg Intelligence analyst George Ferguson says. “I don’t think it’s going to be a long strike because I think Boeing is going to have to go back and make their offer better, soon.” pic.twitter.com/iBEiyuYzsQ
— Yahoo Finance (@YahooFinance) September 13, 2024
Hundreds of workers manned picket lines at the Renton factory outside of Seattle that makes Boeing’s top-selling aircraft, the 737 Max, as the strike began, Bloomberg reports, adding:
“It’s been an amazing experience to be a part of this and all the camaraderie,” said Chris Solis, 19, who just celebrated his one-year anniversary at Boeing and was getting his first taste of a strike.
“We’ve heard all sorts of things from different people, but the way that the company is acting just doesn’t seem very fair.”
The Financial Times points out that the Boeing strike – which began just after midnight, Pacific time – could hurt the company’s financial postion.
The FT explains:
The strike will limit Boeing’s ability to deliver planes, slowing its cash flow after it reported an $8.3bn outflow during the first half of the year.
The company’s credit rating stands one notch above junk, and avoiding a downgrade depends on its ability to generate cash from deliveries.
