Bank of America senior aerospace analyst Ron Epstein shared his thoughts on the current state of aerospace giant Boeing as the company names a new CEO.
Aerospace giant Boeing The company faces a new challenge: a strike by 32,000 workers that could begin this month if the company and the union cannot reach an agreement.
Boeing and International Association of Mechanical Engineers (IAM) It's set to expire on September 12, and union members who make planes at a Boeing factory in Washington state have threatened to strike if their demands are not met.
In mid-July, union members approved a strike authorization vote with a 99.9% vote in favor. A strike authorization vote is common in negotiations between a union and a company and does not necessarily mean a strike will take place.
“We remain confident that we can reach an agreement that balances the needs of our employees with the business realities we face as a company,” Boeing said in a statement to FOX Business.
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About 32,000 members of the Machinists Union have threatened to strike against Boeing this month if no agreement is reached on a new contract. (Jennifer Buchanan/Pool/AFP via Getty Images)
IAM District 751 President John Holden said in a statement Sunday that the union is “fighting for respect” from Boeing, seeking “fair wage increases that reflect the value we bring and a retirement plan that rewards our seniority and skill when we can no longer work and need to leave our jobs.”
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| BA | Boeing | 161.02 | -12.72 |
-7.32% |
“Our proposal is not only reasonable, but essential to stabilise a company that is currently in freefall. While leadership will come and go, it is the IAM's members who fabricate, drill, fasten, assemble and test,” Holden said. “It is the IAM's members who move the parts and planes and maintain the machines. The lifeblood of the factoryNever forget, without IAM there is no Boeing.”
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Boeing has faced several headwinds this year, from mid-air accidents to manufacturing quality issues to a change in CEO. (David Ryder/Bloomberg via Getty Images)
The strike threat comes as Boeing is going through a particularly tough year following an accident in which a door panel on one of its planes blew off in mid-air. 737 Max 9 The January incident caused cabin depressurization and forced the plane to return to Portland, Oregon, for an emergency landing.
The accident caused delays and shutdowns of production lines to address quality control issues while Boeing, the Federal Aviation Administration (FAA) and the National Transportation Safety Board investigated the problem. Boeing CEO Dave Calhoun resigned amid the controversy and was replaced by a new CEO. CEO Kelly Ortberg.
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Boeing's new CEO, Kelly Ortberg, is seeking to reach an agreement with the IAM union to avoid a strike. (Daniel Acker/Bloomberg via Getty Images)
Anita Mendiratta, special adviser to the United Nations Secretary-General for Tourism and author of “A Call to Leadership: Unleashing Your Inner Leader in Times of Crisis,” told Fox Business that the labor dispute poses an early challenge to Ortberg's efforts to change Boeing's culture.
“This really calls into question Kelly Ortberg's ability to lead from the front line because ultimately, if we want to turn around Boeing's fortunes in terms of restoring quality, culture, customer service capabilities, rebuilding trust in the business and the brand, and turning around profits, it's going to come down to production,” Mendiratta said. “The strike really strikes at the heart of his ability to transform the culture of service and quality for the people who work at Boeing, and therefore the people who work at Boeing will be the first domino that will tip the rest of the recovery process.”
“What we need to be conscious of and empathize with is that the people Boeing represents — its more than 150,000 U.S.-based employees — have had four CEOs in the last decade,” she added. “They've been continually let down, so why should they believe that Mr. Kelly will bring about change?”
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Mendiratta said Ortbar was “accepting responsibility” and was negotiating with the FAA. Regulatory issues “We are in a very delicate position,” he said, but this is also “a great opportunity to show that management has changed,” he said.
Boeing shares have fallen more than 36% since the beginning of the year on concerns about a possible strike and were down more than 7.3% in Tuesday's trading session.
