Acting U.S. Labor Secretary Julie Su has traveled to Seattle in an effort to mediate between Boeing and the union representing approximately 33,000 striking workers. This development, reported by Reuters, comes as the aerospace giant faces a crippling strike that has entered its fifth week. Boeing has announced plans to eliminate 17,000 jobs and is expecting a $5 billion financial impact due to widespread issues across its operations.
According to an anonymous source, it remains unclear if Su will meet with Boeing CEO Kelly Ortberg. However, the U.S. Department of Labor confirmed on Monday that Su is actively engaged in efforts to bring both sides back to the negotiating table. A department spokesperson said, "Acting Secretary Su is meeting with both parties today to assess the situation and encourage them to move forward in the bargaining process."
Boeing’s stocks fell by 3% following the company's unexpected Friday announcement. The company also revealed further delays in the production of its 777X jetliner, along with plans to cease the production of the 767 freighter.
Internal meetings at Boeing are scheduled for this week to discuss the planned job cuts, which are expected to include involuntary layoffs to reduce costs while attempting to retain employees with critical skills. Industry insiders have noted that Boeing is facing increased competition for labor in a post-pandemic environment where skilled workers are scarce. "The challenge will be retaining the 10% of workers that Boeing wants to keep, especially during a time of workforce shortages," said Nick Cunningham, an analyst at Agency Partners.
Boeing has also delayed deliveries of its 777X jetliner by another year, pushing the launch to 2026 due to ongoing certification and testing issues. This six-year delay has frustrated major customers like Emirates Airline, whose initial order for 150 jets helped launch the 777X project. Emirates President Tim Clark criticized Boeing’s delays, calling them costly for the airline and expressing skepticism about the company's new delivery timeline.
"The numerous contractual shortfalls have forced Emirates to make significant, expensive adjustments to our fleet plans," Clark said in a statement. He also questioned Boeing's ability to provide reliable delivery forecasts, especially in light of the ongoing strike and production challenges.
Emirates is the largest operator of Boeing's 777 jets, which have historically been a long-distance bestseller for the company. However, the delays surrounding the 777X and Boeing's ongoing problems with its 737 line have cast a shadow over its once-dominant position in the market. Boeing’s financial announcements on Friday included $10 billion in gross cash, which analysts believe will provide short-term relief. Still, the company will likely need to raise more funds before the end of the year.
JP Morgan analysts noted that the cash reserves would give Boeing’s management some leverage in its negotiations with the machinists' union. Resolving the strike is critical for Boeing, as the company relies heavily on its 737 production for generating cash flow. S&P Ratings has warned that Boeing’s credit rating could be downgraded if the situation does not improve soon.
The union representing the striking workers expressed concern over Boeing’s decision to halt 767 freighter production and dismissed the company's claims about labor negotiations as unfounded. The strike, which has added to Boeing's woes, remains a significant hurdle in the company’s efforts to recover from its financial and operational challenges.
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