Boeing shares fell by 2.8% during Wednesday trading as the aircraft manufacturer confirmed the withdrawal of its most recent pay proposal to striking workers after negotiations with the International Association of Machinists and Aerospace Workers (IAM) stalled. Recently, Boeing had reached a tentative four-year labor agreement with the IAM, which represents over 33,000 of its workforce, proposing a 25% overall wage increase over the duration of the contract.
However, this proposal was rejected by members from the union's districts 751 and W24. In response, Boeing submitted a new wage proposal later in September, now suggesting a more substantial 30% salary increase. "We have just completed a third round of discussions with a federal mediator, which included two full days of negotiations this week," stated Stephanie Pope, the CEO of Boeing's commercial airplanes division.
She shared this information with employees through a message posted on the company's website. The new proposals included significant boosts in both take-home pay and retirement benefits. Pope indicated that the union did not give the offer serious consideration. Pope explained further, "The union's demands were non-negotiable and exceeded what we could accept if we want to stay competitive as a company.
Considering this stance, continuing negotiations does not make sense right now, and we have withdrawn our offer." In a recent post on Facebook, the union's negotiating committee expressed that Boeing was determined to stand firm on its non-negotiable proposal from September 23, which they deemed as overwhelmingly insufficient.
The IAM did not promptly reply to inquiries from MT Newswires seeking comments on the matter. RBC Capital Markets provided insight in a Tuesday client note that a prolonged strike could intensify pressures on both sides of the negotiation process. They further highlighted concerns regarding Boeing's current cash burn rate and the potential impact on maintaining their credit rating, which could be jeopardized with each passing week of the strike..