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 work stoppage at the Dow Jones aerospace giant's manufacturing facilities. The vote came after Boeing posted a major loss for Q3 results on Wednesday. Boeing stock slid Thursday.
Some 64% of union members who voted Wednesday opposed the tentative agreement reached Saturday.
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. The union's elected negotiating committee reportedly did not recommend for or against the proposal.
However, the negotiations have made some progress. A little less than two-thirds of voting workers rejected the latest offer. For the prior proposal, 95% of the workers rejected the deal at the recommendation of union leaders.
The IAM Union after the vote said it plans to immediately send new dates for further negotiations to Boeing.
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.
Supplier Impact
Shares for Boeing suppliers and partners saw little impact from the rejected deal early Thursday.
Spirit AeroSystems slid 2.3% early Thursday, coinciding with its earnings report. The parts and aero-structure manufacturer negotiated a four-year deal with its IAM workers in June following a weeklong strike. Boeing, meanwhile, is acquiring more than two-thirds of Spirit AeroSystems for $35 per share in a deal worth about $4.7 billion. The companies expect the transaction to close in mid-2025.
Spirit AeroSystems late Thursday missed Q3 views with a wider-than-expected loss. In order to save on costs, the company on Oct. 18 announced a temporary, 21-day furlough of 700 employees working on the 767 and 777 programs starting Oct. 28. If the Boeing strike continues beyond November, Spirit may require additional cost saving measures, including layoffs or additional furloughs, the company said.
GE Aerospace ticked down early Thursday. During the company's earnings call on Tuesday, CEO Larry Culp said GE Aerospace continues to work closely with Boeing and is "committed" to supporting the company as it navigates the strike and quality control concerns. GE Aerospace said it doesn't see the Boeing 777x delays having any impacts from an operational perspective. GE in April 2023 reached a two-year contract extension with its union workers. The company will renegotiate for another contract next year.
Boeing Stock
Boeing fell 1.2% Wednesday, adding to Tuesday's 1.8% decline.
Shares of Boeing have unraveled nearly 41% so far this year, putting it just behind Intel among this year's worst performing Dow Jones Industrial Average stocks.
Shares of Spirit AeroSystems are up less than $3 for the year. GE Aerospace has rallied 77%, and is up about 30% since dividing from GE Vernova on April 2.
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