Boeing records US$6.2 billion in losses and union extends strike

US manufacturer Boeing on Wednesday reported a quarterly loss of nearly $6.2 billion in the third quarter of the year due to problems in its defense and aerospace businesses and a nearly six-week strike that the union will continue after the final rejection of the agreement.

The loss exceeds analyst consensus for the third quarter. The market expected $6.12 billion in red, but the final figure was $6.17 billion.

The aviation giant, which has been under scrutiny from regulators over safety issues, reported revenue fell 1% to $17.8 billion for the quarter.

After nearly six weeks of strikes, this Wednesday night nearly two-thirds (64%) of International Association of Machinists and Aerospace Workers (IAM) District 751 members outright rejected the airline company’s latest contract offer, extending the strike.

“After 10 years of sacrifice, we still have some catching up to do, and we hope to do so by resuming negotiations as soon as possible,” John Holden, president of the Seattle union, said in a statement.

The market has been expecting negative results since new CEO Kelly Ortberg announced on October 11 that she would cut the company’s workforce by 10%.

The defense and aerospace divisions reported a $2 billion loss for the quarter, largely due to the Air Force’s KC-46A Pegasus refueling aircraft, which had already caused problems in previous quarters.

Meanwhile, complications with the 777X and 767 models, as well as an ongoing strike by the IAM union, have created another $3 billion financial hole.

Boeing shares lost 1.8% at the close of trading Wednesday on Wall Street.

– Strike and voting –

On September 13, approximately 33,000 IAM workers in the northwestern United States went on strike.

“Ten years of employee reprimands cannot be undone quickly or easily, but we will continue to negotiate in good faith until we achieve results that employees feel adequately compensate for what the company has taken from them in the past,” added this Wednesday union leader Holden. after the new agreement was rejected.

CEO Ortberg on Wednesday expressed moderate optimism about ratification of the latest contract.

“We are working hard to find a solution that works for the company and meets the needs of our employees,” he said in a message to employees accompanying third-quarter results.

In an interview with CNBC, the executive assured that the staff cuts were not related to the strike, but said they were necessary because the company has more employees than its business currently needs.

Before the shutdown, Boeing began producing fewer planes to focus more on safety protocols after a fuselage panel on an Alaska Airlines 737 MAX jet broke off mid-flight and forced it to make an emergency landing in January.

The incident comes years after two fatal accidents involving the same model in 2018 and 2019 killed 346 people.

Boeing is under intense pressure from aviation authorities.

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