As roughly 33,000 Boeing union employees remain on strike, the company has implemented sweeping cost cuts – including a hiring freeze.
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Conway Gittens: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
The Dow set a record closing high on Monday, but the broader market struggled on the back of weakness by Apple. The stock was under pressure amid speculation that debut pre-orders for the new iPhone 16 are not strong enough.
Anticipation is building toward the Federal Reserve’s decision on interest rates. Policymakers begin their two-day meeting on Tuesday. Investors will also have the latest retail sales figures to look over.Boeing strike brings airplane production to virtual standstill.
Turning to other business headlines: Boeing is tightening its belt as a workers’ strike halts production of its money-making 737 aircraft. More than 30,000 workers walked off the factory floor last week and are now on the picket line. One analyst says Boeing will lose a million dollars every day the workers are on strike.
So Boeing is in money-saving mode with a hiring freeze, the possibility of temporary layoffs, and a ban on un-necessary staff travel. In addition, Boeing put a halt on supply purchases for its 737, 767, and 777 jets. This could cause a domino effect among smaller suppliers with Boeing directly or indirectly supporting 1.6 million jobs.
CFO Brian West told employees in a letter, “This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.”
The strike has already put Boeing’s credit rating in jeopardy, which would mean higher borrowing costs and a time when revenues won’t be flowing in. Boeing already burned through $8 billion in the first half of the year and the strike will make its financial situation more tenuous.
These are turbulent times for the aerospace giant. Its rocket division had to leave astronauts at the space station due to safety concerns with its Starliner spacecraft, before that it had to deal with a plane door flying off mid-air, and then there were the two fatal 737 MAX crashes back in 2018 and 2019.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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