It’s been over a month since union members of the International Association of Machinists started a strike against Boeing. As per sources, the Boeing strike has cost the company nearly $5 billion. In recent years, the organization has faced several difficulties, from fatal crashes to increased scrutiny. Additionally, a strike by more than 32,000 workers started on September 23, making matter worse.
According to the new analysis, the shareholders and Boeing workers account for the majority of strike losses, standing at $3.7 billion. After the strike began, the company has not worked on the production of a single plane in Everett, Washington and this had a severe impact on future delivery estimates. The current strike is the first full-blown protest the company has seen in 16 years, and the timing of it has added to the existing financial pressures faced by the organization.
Boeing’s Workers Strike Cost $5 Billion
“Our weekly estimates now reflect much larger losses for other businesses in the Seattle area, along with losses for customers who depend on Boeing’s services and parts,” Patrick Anderson, CEO of Anderson Economic Group said in a statement. He also stated that the Seattle businesses, suppliers, and Boeing customers are paying part of the price.
Boeing suppliers faced losses of $900 million in the first four weeks of the strike while non-Boeing Seattle workers lost $102 million because of its impact. Boeing’s customer airlines are facing significant financial pain as they have also lost $285 million globally.
Anderson said, “Boeing and its shareholders are facing increasing costs as the company uses up its cash. They might need to borrow money or sell stock to keep running during the strike and what could be a tough recovery.”
Boeing Reduces Workforce by 10%
On October 11, Boeing revealed that it expects to cut off 10% of its workforce by laying off nearly 17,000 workers in the upcoming months. Kelly Ortburg, CEO of Boeing, said in an email to employees, “Our business is in a difficult position, and it’s hard to overstate the challenges together.”
Ortburg took the position of CEO in August. Before that, Boeing was found guilty of defrauding the FAA after it failed to reveal a system upgrade on its 737 MAX fleet, which led to a design flaw and caused two crashes, one in 2018 and the other in 2019. Boeing faced nearly $1 billion in fines as part of a plea deal with the Department of Justice. The plea deal is currently under review.
Boeing Strike Update: Latest Developments and Impact
Discussions between Boeing and the striking IAM workers ended last week after two days of federal mediation. In a memo to employees on Monday evening, Stephanie Pope, president and CEO of Boeing’s commercial airplane division, stated, “Unfortunately, the union did not seriously consider our proposals.” She described the union’s demands as “non-negotiable.”
John Holden, IAM president of District 751, said that he is very confident about the strength of the strike fund as money is paid out to every member who is on strike. “It’ll impact the GDP for the year. It’ll impact the aerospace supply chain and production going forward. The longer this goes, the harder it is to restart production and get up to speed,” he explained while speaking about the strike.
