Boeing poised to ‘make a deal’ as stock nears 52-week lows amid labor dispute

Boeing ( BA ) shares hit near 52-week lows on Tuesday as the planemaker tried to reach a deal as soon as possible with its largest union on strike while cutting costs to preserve cash.

On Tuesday, Boeing shares were trading at about $157 each, just $3 off recent lows.

The Arlington, Virginia-based company is facing a machinist union strike over wage increases that began last Friday. Critically for the company, it halted production of the best-selling 737 Max.

The timing and length of the strike could put the company’s recovery in jeopardy as its new CEO, Kelly Ortberg, tries to firmly put recent manufacturing missteps behind it.

“They’re under a lot of pressure to get their assembly line in good shape. And the strike interferes with that and delays any progress they were making in basically decertifying their assembly process for airplanes like the 737,” Morningstar equity analyst Nicolas Owens told Yahoo Finance on Wednesday.

A source familiar with the negotiations told Yahoo Finance that both sides met in person with a mediator on Tuesday to help facilitate talks.

Boeing is “ready to strike a deal,” and Tuesday was the earliest the union could meet, according to the source.

At the same time, the company on Monday instituted aggressive cost-cutting measures that included a hiring freeze. The company is also considering temporary furloughs for many employees in the coming weeks.

While Moody’s recently revised Boeing’s credit rating, S&P Global said its status is safe for now, provided the strike is short-lived, which many Wall Street analysts expect it will be.

“A shorter strike, on the order of weeks, would probably be manageable for Boeing and not result in a negative rating action. However, we believe a prolonged strike would be costly and difficult to absorb given the company’s already strained financial position,” S&P said in a statement this week.

The aircraft manufacturing giant has navigated a terrible year, starting in early January when the fuselage of a 737 Max 9 opened at 16,000 feet during an Alaska Airlines (ALK) flight.

The incident led to a series of regulatory issues, investigations, lawsuits, production delays, the replacement of a CEO, and a drop in stock price.

Last month, Ortberg, an aerospace industry veteran and Boeing outsider, took over the company’s top job.

At the Morgan Stanley Laguna conference last Friday, CFO Brian West noted “good momentum” ahead of the strike, with “accelerated production while at the same time incorporating significant improvements” in the manufacturer’s quality and production system.

The story continues

Boeing shares are down more than 35% year to date. They hit a 52-week low on Monday. The company is expected to report quarterly results next month.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow X at @ines_ferre.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance