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Boeing’s (NYSE: ) seven-week labor dispute may be nearing its end as the International Association of Machinists and Aerospace Workers (IAM) . The strike, involving 33,000 workers, has dealt significant financial blows to the aerospace giant while highlighting ongoing tensions over employee benefits and compensation.
Latest Proposal from Boeing Includes a 38% Wage Increase
The latest proposal from Boeing includes a 38% guaranteed wage increase over four years and a $12,000 signing bonus, marking a substantial improvement from the previously rejected offer that featured a 35% raise and $7,000 bonus.
The new terms come after 64% of union members voted down the earlier proposal, with workers particularly concerned about Boeing’s stance on reinstating the defined benefit pension plan eliminated a decade ago.
The situation intensified on October 1 when Boeing discontinued employee healthcare benefits, leaving strikers to rely on $250 weekly strike pay.The prolonged work stoppage has severely impacted Boeing’s operations, forcing the company to announce plans for – approximately 10% of its commercial unit. The strike escalated existing challenges for Boeing, which was already grappling with quality control issues in its commercial aviation division and a $2 billion loss in its defense and space business.
Financial Toll of Boeing’s Labor Strike Mounts
The financial impact of the strike has been devastating for Boeing, which reported a $6 billion loss for the third quarter of 2024, with revenue declining from $18.1 billion to $17.8 billion year-over-year. Total estimated direct economic losses have reached $7.6 billion, including $4.35 billion in losses for Boeing and nearly $2 billion for its suppliers. The company’s stock has suffered as well, with year-to-date returns down 40.75%, significantly underperforming the S&P 500’s 20.65% gain.Despite the ongoing challenges, Boeing’s stock showed signs of optimism on Friday, trading up 3.43% at $154.43 by midday. However, the company’s broader financial metrics remain concerning, with a negative profit margin of 10.88% and of -$12.95. While Boeing maintains $10.47 billion in cash reserves, its market capitalization has dropped to $115.448 billion, reflecting investor concerns about the company’s path to recovery amid labor disputes and operational challenges.More By This Author:ExxonMobil Achieves $1.92 EPS In Third Quarter 2024, Slight Miss On RevenueChevron’s Third Quarter 2024 Earnings Slightly Exceed ExpectationsUber’s Q3 Results Beat Expectations, But Shares Drop On Growth Concerns
