As hundreds of Boeing employees continued their strike into the second month, the company unveiled plans for Boeing strike funding, aiming to raise $35 billion in capital. Boeing plans to secure $25 billion through stock and debt offerings, alongside an agreement with central banks to borrow up to $10 billion. The company stated these Boeing strike funding measures are essential to maintain liquidity during the prolonged labor action.
The announcement came shortly after Boeing said it would reduce its staff by 10%, affecting around 17,000 people, with layoffs starting mid-November same day, the International Association of Machinists and Aerospace Workers (IAM), the union representing over 30,000 workers, held a demonstration in Seattle. To resolve the protest, the business had previously promised a 30% salary increase over four years, but discussions broke down last week when Boeing retracted the offer. As a result, the strike, which S&P Global estimates costs the corporation $1 billion per month, is still affecting Boeing’s operations.
Boeing stated it will enforce layoffs, but striking employees will not be affected for now. The company will offer severance payments to workers. Despite the company’s financial woes, Boeing’s shares increased by 2.2% on the announcement of its fundraising efforts. The airline has announced a one-year delay in the delivery of its 777X planes.
The Biden administration has noticed the walkout; on Monday, temporary Labor Secretary Julie Su met with union representatives and Boeing executives in Seattle. According to top Democrats from Washington state, both parties should intensify their efforts to reach an agreement.
Boeing will release its quarterly earnings report on October 23. According to credit rating agencies, the prolonged strike may result in downgrades, which would increase the corporation’s borrowing cost. Boeing, a vital cog in the US economic wheel, is central to the ongoing labor dispute.
