Union members have rejected Boeing’s latest offer, meaning a strike that is costing the company $1 billion a month will continue.
Transcript:
Conway Gittens: The Nasdaq leads the way Thursday after Tesla earnings far exceeded forecasts and quarterly revenue came in slightly below expectations. Meanwhile, weekly jobless claims were softer than anticipated. The report is adding to bond market speculation the Federal Reserve may not have to tinker with interest rates all that much in order to get the economy where it wants it.
There’s big news involving Boeing. The 33,000 striking machinists rejected management’s proposal in a majority vote. 64 percent of the Members of the International Association of Machinists and Aerospace Workers voted against the contract.
In a statement emailed to reporters, local union officials said, “After 10 years of sacrifice, we still have ground to make up, and we’re hopeful to do so by resuming negotiations promptly. This is workplace democracy – and also clear evidence that there are consequences when a company mistreats its workers year after year.”
This turn of events is a major blow to Boeing, which was already bleeding cash before the strike stopped production on its most profitable plane. New CEO Kelly Ortberg is desperately trying to shore up the company’s finances. Less than 24 hours before the vote, Boeing posted a $6 billion loss for the third quarter – its worst earnings report since the pandemic stopped all air travel in 2020.
This strike could have economic and political implications as Boeing is one of the nation’s biggest exporters. In addition, its plane manufacturing operations support an entire ecosystem responsible for 1.6 million jobs, according to company estimates.
Aviation consultant Scott Hamilton told Reuters “It’s bad for everybody – Boeing, labor, suppliers, customers, even the national economy.”
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