How an extended strike hurts Boeing's comeback
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Strikers near Boeing Field in Seattle this month. Photo: Jason Redmond/AFP via Getty Images
Boeing's path to recovery is in limbo after its factory workers voted down a new contract proposal Wednesday night, continuing a labor strike that already has lasted six weeks.
Why it matters: The strike of roughly 33,000 machinists has halted production at Boeing's factories in Everett, Renton and elsewhere, compounding ongoing airplane delivery delays as the company struggles to rebound from a series of quality and safety problems.
- Those incidents included a January door plug blowout that caused an airplane panel to fly off mid-flight, and two 737 MAX crashes in 2018 and 2019 that killed 346 people.
Between the lines: Boeing's current labor issues, on the heels of the fallout from the crashes and the door plug issue, could jeopardize the company's financial stability and future credit rating, industry analysts say.
- Boeing released an earnings report on Wednesday showing the company had lost about $6.2 billion over the third quarter, reflecting the impacts of the strike, it said.
Zoom in: Among other things, Boeing machinists want a 40% pay raise and a reinstatement of a defined benefit pension plan.
- "This membership will continue to stand on the line, picketing for the contract they deserve," the International Association of Machinists and Aerospace Workers union posted on X after Wednesday's vote.
What they're saying: New Boeing CEO Kelly Ortberg told staffers Wednesday morning before the vote that the company will focus on "fundamentally changing the culture" and "getting back to the values that helped define [its] legacy."
- Ortberg, who took over as CEO two months ago, has been leading the company's efforts to repair its finances and its battered reputation.
- The company later released a statement saying that it was "disappointed in the result of the vote."
The big picture: Boeing shares have already fallen about 40% this year, and shed about 2% more after Wednesday's news.
Go deeper: Boeing's recovery on hold as workers strike strains finances