Boeing, union negotiators to meet as striking workers dig By Reuters

By Joe Brock

SEATTLE (Reuters) – Negotiators at Boeing ( NYSE: ) and its largest union are set to resume talks over a labor contract on Tuesday as the planemaker tries to quickly end a strike that has cost the company about 100 millions of dollars. a day

More than 30,000 workers at Boeing’s Seattle-area factory went on strike Friday after overwhelmingly rejecting their first full contract offer in 16 years, which included a 25 percent pay increase spread over four years, but eliminated an annual performance bonus.

Top negotiators from Boeing and the International Association of Machinists and Aeronautical Workers (IAM) will meet with federal mediators in Seattle on Tuesday for preliminary talks, a person familiar with the process said.

Boeing and union negotiators are not expected to discuss the details of a new offer at the meeting, which is more about setting the rules for future talks, another source with knowledge of the mediation said.

The sources declined to be identified because they were not authorized to speak to the media. Boeing and IAM declined to comment.

A prolonged strike could cost Boeing several billion dollars, wrecking the planemaker’s already strained finances and threatening a downgrade to its credit rating, analysts say.

Boeing said Monday it was freezing hiring and weighing layoffs as it tries to cut costs to limit the impact of the strike and control its debt, which stands at about $60 billion.

Union members holding picket lines outside Boeing factories in Seattle have expressed little sympathy for the company’s financial situation, with many saying they anticipate a prolonged period of negotiations and a strike of several weeks.

“It makes me a little happy to see that they are showing the first signs of fighting because I don’t think they care about their workers at all,” said Martin Klyavkov, 20, who works building wings for Boeing’s best-selling 737. MAX.

“Boeing is going to get desperate one of these days and cave.”

Klyavkov and several other young Boeing workers told Reuters they were taking part-time jobs as food delivery drivers to supplement the $250 a week the union will pay during a strike starting on the third week.

Boeing and union leaders miscalculated during their initial negotiations, announcing an agreement on a tentative contract that more than 94 percent of IAM workers later rejected. The union initially asked for a 40% raise.

Analysts expect it will take time to rebuild trust and bring a new deal to workers who are taking out the frustration built up over a decade of stagnant wages and rising living costs.

Equity research firm Melius Research found that average employee compensation for the aerospace and defense firms it tracks rose 12% between 2018 and 2023, while at Boeing it fell 6%.

“I think it’s going to take some time for them to come to an agreement,” said Bill George, ex Medtronic (NYSE:) CEO and Executive Fellow at Harvard Business School.

“Compensation could rise to the point where it’s not competitive for Boeing, but that could be the lesser of several evils in terms of a long strike.”