Acting US labour secretary attempts to intervene in Boeing strike

While Su has previously spoken with Boeing and the union, it is her first time in Seattle meeting both sides in person, the spokesperson said.

 

The International Association of Machinists and Aerospace Workers (IAM) said its lead negotiator, Jon Holden, had updated Su on the current talks, “stressing the Union’s commitment to a negotiated contract that values our members’ skills and dedication.”

 

Boeing and a White House spokesperson declined to comment on Su’s visit.

 

Roughly 33,000 workers have been on strike since Sept 13, seeking a 40 per cent wage increase over four years.

A Seattle Times report late on Monday said IAM members would not be among the 10 per cent of Boeing workers laid off for now, citing slides from an internal company presentation.

 

Boeing and the IAM did not respond to a request for comment on the report.

 

Shares of the aerospace giant fell 1.3 per cent to close at $148.99 on Monday, following the company’s surprise after-hours job cut announcement on Friday, which also included a new delay to the 777X jetliner and the ending of civil 767 freighter production.

 

Boeing will hold meetings this week to lay out detailed plans, having given few specifics in Friday’s announcement, industry sources said. The company also expects a quarterly cash burn of about $1.3 billion, better than anticipated, but still the third consecutive quarter it has burned through cash.

 

Boeing will next month send out 60-day notices to thousands of workers in its commercial aviation division, meaning those staff will leave the company in mid-January, one source familiar with the matter said.

 

A second phase of notices, if more redundancies are required, would be rolled out in December, the source said.

 

Boeing is expected to refrain from asking for voluntary departures to limit severance cash and avoid an exodus of skills, sources said, adding the company will rely mainly on involuntary layoffs. Rivals are scooping up scarce labour to relieve pressure on aerospace supply chains.

 

“The trick will be not losing the 10 per cent of people you want to keep, which is even more important than usual in the post pandemic skill shortage environment,” said Agency Partners analyst Nick Cunningham.

 

Industry Alarm

The one-year delay in 777X deliveries to 2026 was widely expected in the industry and brings the lag in delivery of the 777 mini-jumbo successor to six years amid certification and testing delays.

 

Emirates Airline President Tim Clark, whose initial order for 150 jets helped launch the world’s largest twin-engined jet more than a decade ago, hinted at commercial repercussions.

 

“We will be having a serious conversation with them over the next couple of months,” he said in a statement. “I fail to see how Boeing can make any meaningful forecasts of delivery dates.” He also became the first senior industry figure to articulate fears, whispered privately by some industry leaders in recent weeks, over Boeing’s ability to tackle its worst-ever crisis intact.

 

“Unless the company is able to raise funds through a rights issue, I see an imminent investment downgrade with Chapter 11 looming on the horizon,” Clark told the Air Current, an aviation industry publication.

 

Emirates is the largest user of the 777 jet family, a long-distance workhorse whose original success has been clouded by delays to its successor and the crisis engulfing Boeing’s smaller 737 cash cow over safety and quality issues.

 

Friday’s package of announcements showed Boeing has just over $10 billion of gross cash, a much-touted level that analysts said would ease some near-term pressure, though the company still needs to raise money by year-end, they said.

 

Most analysts expect Boeing to be able to raise up to $15 billion through a share issue. But the perception of major airlines to Boeing’s financial risk remains a sensitive topic as many have billions of dollars of deposits sitting with the planemaker – an exposure some already want to limit because of delays, industry sources say.

 

Boeing declined to comment on Clark’s remarks.

 

Ratings agency S&P has warned Boeing risks losing its prized investment-grade credit rating.

 

Meanwhile, US Secretary of the Army Christine Wormuth on Monday said recent layoff announcements were not expected to disrupt its programs, which include helicopters and munitions.

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Oct 15 2024 | 10:01 AM IST