Boeing under Pressure: Negotiations with Strikers Failed, S&P Warns

Boeing's shares suffered a setback on Wednesday after the aircraft manufacturer withdrew its contract offer for the striking machinists, and S&P Global placed its bond rating on a watch list. Stephanie Pope, both COO of Boeing and CEO of Boeing Commercial Airplanes, informed employees that the company's leadership team was intensely working to find common ground with the union. However, after a third round of negotiations mediated by federal authorities, it became apparent that the union was not seriously considering Boeing's proposals and instead made unacceptable demands that the company could not accommodate. In light of these circumstances, Pope emphasized that further negotiations currently made no sense, and the offer was withdrawn. The 33,000 members of the International Association of Machinists and Aerospace Workers had already walked off the job last month after the rank and file rejected a previously drafted contract proposal. S&P Global sees increased financial risk for Boeing in light of the strike and estimates that the company will experience a cash outflow of $10 billion this year. The agency placed Boeing's bond rating on "CreditWatch with negative implications," reflecting the increased likelihood of a downgrade should the strike continue until the end of the year. Boeing shares recently fell by 2.2% to $151.26, approaching their lowest level in two years.