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Machinists Report ‘No Meaningful Progress’ In Boeing Talks

Boeing
Credit: Stephen Brashear / Getty Images

The first two days of mediated talks between representatives from Boeing and its striking International Association of Machinists (IAM) employees offered little encouragement that the walkout will be short-lived, increasing the likelihood that near-term financial ramifications will be significant.

“Unfortunately, mediation concluded today without reaching any resolution,” the IAM negotiating team said in a statement late Sept. 18. “No meaningful progress was made during today’s talks.”

No further talks were scheduled, the statement added.

News of the continued impasse comes as Boeing ramps up a sweeping cost-cutting plan that includes rolling one-week furloughs for thousands of employees across the company.

A Sept. 18 message to employees from CEO Kelly Ortberg said the company will “prioritize ... all activities critical to our safety, quality, customer support and key certification programs ... including 787 production.” It does not say, however, that those areas will be unaffected by the furloughs.

Employees represented by the Society of Professional Engineering Employees in Aerospace (SPEEA) cannot be required to take unpaid time off per the terms of their current contract.

Boeing asked SPEEA to include its unionized engineers and technical workers in the furloughs along with other affected work groups, the union said late Sept. 19. SPEEA's seven-member executive board unanimously rejected the company's request.

“We don’t see any compelling reason to change the provisions of our collective bargaining agreement,” said SPEEA President John Dimas. "Our contracts, with their legally enforceable prohibitions on furloughs, remain in place.”
 
SPEEA said it "strongly supports" the striking machinists, calling Boeing's planned furloughs a mistake.
 
"Boeing’s financial problems are largely self-inflicted," SPEEA Executive Director Ray Goforth said. "Instead of creating some Rube Goldberg furlough scheme to preserve cash, Boeing should give the IAM a contract offer that reflects the value they generate for the company so everyone can get back to building airplanes.”
 
SPEEA's current deal with Boeing expires in 2026. The union's Wichita Engineering Unit opened talks with key Boeing supplier Spirit AeroSystems earlier this week on behalf of 1,000 Wichita, Kansas-based employees whose contract expires Dec. 1.
 
Meanwhile, the IAM strike is exacerbating Boeing's already tenuous financial position.A Bloomberg analysis concludes that if the strike lasts through the end of September, Boeing’s third-quarter free cash flow use could total $3.5 billion. This would leave the company’s cash balances at around $9 billion ... ” close to the [Boeing-acknowledged] minimum for running the company,” the firm added.
 
Boeing began the third quarter with $12.6 billion of cash and securities and $10 billion in undrawn credit, S&P Global Ratings data show. The company also had more than $45 billion in net debt.
 
This story has been updated with additional information from SPEEA.
Sean Broderick

Senior Air Transport & Safety Editor Sean Broderick covers aviation safety, MRO, and the airline business from Aviation Week Network's Washington, D.C. office.