Boeing’s Contract Talks with Largest Union to Resume

(Reuters) – Boeing’s largest union announced on Friday that contract discussions will restart on October 7, as both parties aim to resolve issues that have led to a strike involving approximately 33,000 of the aerospace company’s U.S. West Coast factory workers.

Negotiators from Boeing and the International Association of Machinists and Aerospace Workers (IAM) have faced difficulties in reaching a consensus, recently unable to finalize an agreement on significant topics even with the involvement of federal mediators.

Securing a deal with the IAM, which is negotiating on behalf of its members, is crucial for Boeing (NYSE:BA), particularly as the company deals with increasing debt, a rising cash burn rate, and the risk of losing its investment-grade status.

IAM’s district 751 informed via a post on X that negotiations with Boeing will resume on Monday, supported by federal mediators. The union stated, “This meeting is another critical opportunity to push for the priorities of our membership.”

Boeing confirmed the talks will recommence on October 7. The discussions have garnered attention from U.S. President Joe Biden’s administration, with acting U.S. Labor Secretary Julie Su and her team actively participating in negotiations.

The strike has disrupted the manufacturing of Boeing’s 777, 767, and the highly sought-after 737 MAX jet, crucial for the company’s revenue, particularly as it faces challenges in its defense segment.

This is Boeing’s first strike since 2008 and follows a challenging year for the company, which started with a January incident where a door panel detached from a new 737 MAX during a flight.

Boeing recently presented a “best and final” pay proposal that included restoring a performance bonus, enhanced retirement benefits, and elevating its ratification bonus to $6,000. However, union leaders opted not to present it for a vote.

An earlier agreement suggested a 25% salary increase over four years and a commitment for a new aircraft to be built in the Seattle area if launched during the four-year term, but it was rejected by over 90% of workers in September.

Boeing shares saw a 2.1% increase during afternoon trading on Friday.