Boeing (BA, Financial) has resumed contract negotiations with its largest union after a 25-day strike, aiming to end the walkout by approximately 33,000 factory workers on the U.S. West Coast. Despite a full day of discussions in the presence of a federal mediator, the International Association of Machinists and Aerospace Workers reported limited progress, with talks scheduled to continue.
The union is demanding a 40% wage increase over four years and the restoration of a fixed-benefit pension lost a decade ago. Boeing's latest offer, deemed the "best and final," includes a 30% wage increase and the reinstatement of performance bonuses, which the union has rejected as insufficient.
The strike has disrupted the production of Boeing’s highly profitable 737 MAX, along with the 777 and 767 widebody jets. The 737 MAX is crucial for Boeing's revenue, especially given the lower profit margins in its defense sector.
Boeing is also dealing with legal and financial pressures from past 737 MAX crashes, including an upcoming hearing related to a criminal plea agreement with the U.S. Department of Justice. Earlier this year, Boeing admitted to criminal conspiracy charges related to fatal crashes in 2018 and 2019, committing at least $455 million to enhance compliance and safety programs. The company also faces fines of at least $243.6 million due to a breach of a 2021 deferred prosecution agreement, adding further strain to its current labor disputes.
