Boeing's negotiations fail: Stock in decline

Negotiations between Boeing and its most significant union have stalled. After talks with the machinists' union reached an impasse, the aircraft manufacturer withdrew its contract proposal. Consequently, Boeing's stock suffered a setback of over 2% on Wednesday. Disagreements with the International Association of Machinists and Aerospace Workers, whose members have been on strike for four weeks, could also have financial implications for Boeing. A potential downgrade of the S&P credit rating to junk status is looming. Boeing COO Stephanie Pope stated in an employee email that further negotiations no longer make sense and that their offer has been withdrawn. Union members, however, criticized Boeing's lack of willingness to negotiate wage increases, vacations, or sick leave. The restoration of company pensions was also a contentious issue. In response, S&P expressed concern and placed Boeing on 'CreditWatch Negative', increasing the likelihood of a downgrade if the deadlock persists. Simultaneously, Boeing is attempting to stabilize its production and increase the manufacturing of the Max model to 38 planes per month by the end of 2024, following a safety incident with an Alaska Airlines aircraft. However, the ongoing strikes threaten these ambitious plans and could set the company back significantly in the coming year. Boeing has already taken cost-cutting measures, including the furlough of executives and employees. CEO Kelly Ortberg also announced a pay cut for himself and his leadership team to secure the company's future. The situation remains tense as financial pressure mounts.