Boeing is facing considered considered one of the toughest times in its history. Recently, 33,000 union employees left the job after rejecting the company’s latest contract offer. The strike has only added to the company’s growing list of problems, resembling the 737 Max production issues, financial losses and sinking employee morale.
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The union members, most of them based in Washington state, turned down a proposal to lift wages by 25% over 4 years, as they were pushing for a 40% increase. Boeing’s stock has dropped by over 6% in consequence of the rejection and analysts are warning that rating agencies may lower the company’s debt to junk status.
Robert Kelly Ortberg, Boeing’s recent CEO, is entering a turbulent time after recently purchasing a $4.1 million home in Seattle. He assumed the position following the company’s staggering $1.4 billion loss throughout the 2024 second quarter. Now, he faces a strike that may jeopardize Boeing’s possibilities of recovery.
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To handle these problems, Boeing’s CFO Brian West has devised several ways to cut costs, resembling stopping recent hiring, halting raises, reducing unnecessary travel and even considering temporary layoffs. Boeing also plans to spend less on suppliers and stop buying its own planes, resembling the 737 Max, 767 and 777 models.
While these measures could help Boeing get monetary savings throughout the short term, experts like Jason Walker, a consultant from Thrive HR Consulting, warn they may make things worse in the long run, as they may further damage employee morale, which is already low. Walker noted, “Employees already have a dim view of management and that’s just going to make it worse. I think they’re really in a death spiral of their very own making.”
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The Boeing management is rushing to realize a settlement with the union and stop more harm. West has indicated that he desires to return to the negotiating table and Ortberg actively participates throughout the discussions.
An aerospace advisor, James Darcy, cautioned that although resolving the strike is crucial for Boeing to resume aircraft deliveries and enhance money flow, the settlement conditions “will do nothing to help” the company’s long-term financial health.
Boeing is currently in a vulnerable situation. For considered one of the vital necessary aerospace firms on the planet, the long term appears difficult, given the mounting mistrust between management and employees, enormous financial losses and an unclear plan of motion. It stays to be seen if Boeing can bounce back and win back the trust of every its staff and clients.
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This text Boeing ‘In A Death Spiral Of Their Own Making’ According To A Consultant As ‘Employees Already Have A Dim View Of Management’ originally appeared on Benzinga.com
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