Boeing workers reject new deal, company posts $6 billion loss

The strike is taking its toll on the aerospace industry and the wider economy. Last week, the Anderson Economic Group's latest estimates put the total economic losses from the strike at $7.6 billion, with that figure expected to rise to more than $8 billion this week. The estimates show Boeing workers and shareholders lost at least $5 billion last week, with Boeing's suppliers suffering a loss of about $1.8 billion.

“The costs of the fifth week strike were much higher than the first week and had spread beyond the striking workers at Boeing to many of its managers and engineers, its suppliers and other Seattle-area companies,” said Patrick L. Anderson , the company's CEO, wrote in an email to Assets.

Boeing shares were down just over 1.5% on Thursday morning and are down 38% this year. That started with the famous crash of a Boeing 737 Max plane during an Alaska Airlines flight in January. Shares have fallen about 65% from their all-time high of $440.62 in March 2019.

More than two decades of leadership missteps have eroded the trust of shareholders, customers, regulators and workers alike in the company, new CEO Kelly Ortberg acknowledged Wednesday during the company's earnings call.

“We have too much debt,” he said. “We experienced serious performance deficiencies across the company that disappointed many of our customers.”

Since the company will be burning cash until at least 2025, it can't start producing planes again soon enough. The strike has completely halted production of several aircraft, including the 737 jets. Boeing's commercial business was severely impacted, resulting in a quarterly operating loss of $4 billion.

However, the company's problems are not only related to the strike. The space and defense business, which is not affected by the work stoppage, posted a loss of $2.4 billion.

Ortberg warned investors Wednesday that a turnaround will take time, even if striking machinists return.

“It’s a lot harder to turn this on than to turn it off,” he said. “It's much more important that we do it right than do it quickly. “I expect we'll have a bumpy return.”

Boeing workers want 40% pay raise and pensions

First, however, it goes back to the negotiating table. Many analysts expressed optimism about Wednesday's vote after union officials and Boeing worked together with the help of acting U.S. Labor Secretary Julie Su.

The deal included a 35% wage increase over Boeing's initial offer of 25% and the company's supposedly “best and final” offer of 30% last month, and would have bolstered Boeing's 401(k) contributions.

But the deal was rejected by 64% of union members, who demanded a 40% wage increase after years of saying their wage increases fell well short of the rising cost of living in the Pacific Northwest.

“There are consequences when a company mistreats its workers year after year,” Jon Holden, president of the International Association of Machinists and Aerospace Workers, District 751, said in a statement announcing the vote.

Union members are also insisting on restoring a defined benefit pension plan that they lost a decade ago after Boeing threatened to build its 777X jet at a non-union plant. So far, Boeing has not fulfilled this obligation.