Boeing shares fell by about 2% in trading before the market opened in the United States on Thursday, after workers decided to extend their strike that has been ongoing for nearly 6 weeks, casting doubt on the company’s efforts to achieve financial stability and restore its public image.
Boeing shares fell 1.95% to $154 at the time of writing.
Yesterday, about 64% of Boeing factory workers on the West Coast of the United States rejected the company’s latest offer, which led to the cessation of production lines for almost all commercial aircraft produced by the company, including the 737 MAX model, which it considers the basis of its financial budget.
the offer
The offer included a general wage increase of 35% over the next four years, but did not include a specific plan for retirement, which is one of the main demands of the striking workers.
In turn, Nick Cunningham, an analyst at Agency Partners, said: “Boeing will have to settle the matter and make a higher offer, because they are not in a position to enter into (a conflict).”
Analysts said the workers’ decision could affect the refinancing efforts the company needs to stabilize its operations after the strike hampered its recovery from a series of previous crises.
Raise capital
Last week, Boeing submitted documents giving it an opportunity to raise up to $25 billion to avoid losing its investment grade rating, in addition to securing a loan worth $10 billion.
But although many analysts say that the company prefers to wait until the strike ends and start generating more revenue by delivering its orders before heading to the financial markets, the conflict between workers and management puts it under increasing pressure to settle the matter.
JPMorgan analyst Seth Siefman said after the workers’ decision: “We do not rule out a capital increase before the strike ends… depending on market conditions.”
Last Friday, Boeing announced that it would reduce the number of jobs by 17,000, or 10% of the number of its employees globally, and that it would save $5 billion in costs, in a continuation of the chaos that has been going on at the company for a year, after an emergency occurred during the flight of the “737 MAX 9” plane belonging to Alaska. Airlines.
