Striking Boeing workers rejected a labor deal that would have hiked pay by 35% over four years. the machinists union announced Wednesday night. That means the crippling work stoppage will go on for the Dow Jones aerospace giant.
Some 64% of union members who voted Wednesday opposed the tentative agreement reached Saturday.
Early Wednesday, Boeing reported a wider-than-expected adjusted third-quarter loss. Boeing stock, near a two-year low, fell modestly Wednesday.
Boeing lost an adjusted loss of $10.44 per share, widening from $3.26 per share last year. Revenue declined 1% to $17.84 billion.
FactSet expected an adjusted loss of $10.35 per share on $17.82 billion in revenue. Analysts lowered their sales forecasts from around $18 billion after Boeing's Q3 preview on Oct. 11, which called for a GAAP loss of $9.97 per share on $17.8 billion in sales.
The adjusted loss reflected impacts from the IAM work stoppage, as well as over $5 billion in charges for its commercial and defense programs, which were previewed in the Oct. 11 release.
Boeing reported a net loss of $6.17 billion for the quarter, compared to a loss of $1.64 billion last year.
"It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again," CEO Kelly Ortberg said in the earnings announcement. "Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing."
Commercial airplane deliveries rose 10% during the quarter to 116 planes, while revenue fell 5% to $7.44 billion. Boeing's commercial airplanes loss from operations widened to over $4 billion, from $678 million last year.
Defense, space and security revenue rose 1% to $5.54 billion. But the defense loss from operations increased to $2.38 billion from $924 million last year.
Boeing said it now has access to total credit facilities of $20 billion, which remain undrawn.
The Dow Jones plane maker on Oct. 15 secured a $10 billion credit agreement with multiple banks and filed to raise up to $25 billion in stock and debt. The company also announced plans to cut 10% of its workforce over the coming months, affecting roughly 17,000 employees.
Union Workers Reject Offer
In its latest proposal, Boeing offered International Association of Machinists union workers a 35% wage increase over four years, up from its previous offer for a 25% raise, according to reports. Nearly 95% of the workers rejected the prior deal at the recommendation of union leaders.
Reports indicate the union has been seeking a 40% raise as well as additional changes and benefits.
Following the latest offer, the IAM wrote to its members, "we have received a negotiated proposal and resolution to end the strike, and it warrants presenting to the members and is worthy of your consideration."
The top earners for the union make about $51 per hour. That works out to $115,000 per year before benefits and overtime, Barron's reported. If accepted, the new deal would push that to nearly $70 per hour by 2028, or roughly $140,000 before benefits and overtime.
The 33,000-strong worker strike that began on Sept. 13 has hobbled the Arlington, Va.-based company, which was already dealing with various quality control issues and safety concerns.
Boeing Stock
Boeing slid 1.8% Wednesday, falling from near the 50-day line BA stock climbed off 2024 lows last week.
Still, Boeing shares have unraveled nearly 40% so far this year, putting it just behind Intel among this year's worst performing Dow Jones Industrial Average stocks.
BA stock was indicated lower overnight following the union vote rejection.
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