Market Analysis

Boeing (NYSE) could face a strike as early as Friday if more than 30,000 workers in the U.S. Pacific Northwest, represented by the International Association of Machinists District 751, vote to reject a proposed labor agreement and proceed with a work stoppage.

The aerospace company previously reached a tentative deal offering a 25% wage increase, a $3,000 signing bonus, improved retirement benefits, and a pledge to build a new aircraft in the Pacific Northwest. The agreement also included enhanced union input into jet quality.

However, reports suggest that workers in Washington and Oregon are likely to reject the deal on Thursday, seeking larger pay raises and additional improvements. Jon Holden, the union's chief negotiator, told Reuters that employees are "angry" about several important issues.

If the workers vote against the current proposal, they would then hold a second vote to determine whether to initiate a strike.

A potential strike would increase pressure on Boeing’s new CEO, Kelly Ortberg, who is working to stabilize the company’s finances and restore its reputation following a dangerous mid-air door plug breach earlier this year. Ortberg has cautioned employees that a strike could jeopardize the company’s recovery, according to internal communications cited by various media outlets.

“I urge you not to let past frustrations jeopardize the chance to secure our shared future,” Ortberg said in the message.

Analysts at TD Cowen estimate that a 50-day strike could cost Boeing $3 billion to $3.5 billion in cash flow. A previous strike in 2008 resulted in revenue losses of approximately $100 million per day.

Paraphrasing text from "Reuters" all rights reserved by the original author.