Boeing withdraws offer to striking machinists, halts talks

Boeing (nay) withdrew its latest offer to union machinists on Tuesday after negotiations broke down as the strike is heading into its fourth week.

The Arlington, Va.-based firm’s offer — which it labeled “the best and final proposal — included 30 percent pay raises for the 33,000 factory workers who have been on the picket line since Sept. 13, after rejecting a provisional employment contract.

District 751 of the International Association of Machinists and Aeronautical Workers (IAM), which represents these workers, has sprawling Boeing’s offer is disrespectful. The union has argued its workers need a 40 percent pay rise to combat the cost of living, a return to the pension system it gave up in a 2014 settlement, more contribution to product safety and other benefits.

“Unfortunately, the union has not seriously considered our proposals,” Boeing Commercial Airplanes chief Stephanie Pope said in a memo to employees Tuesday, according to Reuters. “Further negotiations do not make sense at this time,” Pope added, while the executive called IAM’s demands “non-negotiable.”

As the strike continues, its economic impact grows. There are already some concerns that it will crash November jobs report. In addition to the more than 30,000 workers who walked off the job, Boeing has initiated holidays. Boeing’s problems – which began this year with a almost catastrophic incident involving a 737 Max 9 jet and led to intense scrutiny of its operations – may also have repercussions for Boeing suppliers.

“Recent hurricanes in Florida and the Carolinas and the Boeing hit have the potential to weigh on GDP growth for the rest of the year,” Oxford Economics analysts wrote in a recent note.

S&P Global Mobility (SPGI) on Tuesday estimate that Boeing will incur a cash outflow of about $10 billion in 2024, partly due to the strike and steps taken to overhaul its manufacturing process, and issued a negative outlook on the company’s credit ratings. Boeing is expected to burn 50 million dollars a day in cash because of the strike.

Boeing seeks options to raise billions of dollars, Reuters (THREE) reported, including the sale of shares and equity-like securities.