On September 29th, it was reported that negotiations between Boeing and its largest union had reached an impasse, as the two sides failed to reach a consensus on resolving the strike issue.

The main point of contention in this negotiation breakdown is the lack of progress on the pension issue for Boeing workers, coupled with the company's failure to provide a substantial response on wage increases. The International Association of Machinists and Aerospace Workers announced that there are currently no plans to schedule new negotiations.

The Boeing strike has been ongoing for nearly half a month, dating back to September 8th. At that time, Boeing and its largest union, IAM 751, announced that they had reached a preliminary agreement on a new four-year contract, which included a 25% wage increase over the contract period and a commitment to build Boeing's next aircraft in the Seattle area.

However, Boeing employees voted against this preliminary agreement with a 94.6% turnout, far exceeding the two-thirds vote required for a strike. At midnight on September 13th, more than 30,000 Boeing employees in the Seattle area and Oregon officially went on strike. Aerospace analysts at Jefferies stated that the strike could cost Boeing up to $1.5 billion in cash over 30 days.

In the face of the strike action, Boeing initially adopted a hardline strategy of "retreating instead of advancing," cutting employee benefits across the board to force an end to the strike. On September 16th, Boeing's Chief Financial Officer, Brian West, stated that in order to maintain cash, Boeing decided to further reduce operating costs, including freezing recruitment and suspending non-essential employee travel until the strike ends.

On September 21st, Boeing escalated its sanctions against employees. Boeing CEO Kelly Ortberg announced the forced implementation of unpaid leave for thousands of employees participating in the strike to compensate for the daily loss of $100 million caused by the strike to Boeing. In addition, Boeing also stated that it would stop paying health insurance for these workers on September 30th.

The contradictions between the two sides are intensifying.

Two days later, Boeing finally "softened" and proposed the "best and final" version of the solution to the striking workers, which included wage increases and higher bonuses. Boeing stated in an internal letter that if employees accept the proposal before Friday local time, Boeing will restore employee performance bonuses, increase workers' retirement benefits, and double the approved bonus to $6,000.

In addition, Boeing's new proposal also includes raising the basic wages of employees by 30% over four years, higher than the 25% in the first proposal. Boeing stated that by the end of the four-year contract, the average annual salary of Boeing engineers will rise from the current $75,608 to $111,155, which is a significant increase.

However, this proposal did not satisfy the striking workers, who initially envisioned a 40% increase in basic wages for employees within three years.

Today, Boeing has once again presented a new offer. Although the specific details have not been disclosed, this offer is obviously not satisfactory to the union, and the two sides have not reached an agreement in all areas such as basic wage increases, pension increases, and performance increases. The breakdown of this negotiation symbolizes that the already tense relationship between the two sides has once again fallen to an ice point, and the strike continues.

Media comments suggest that this strike will basically halt Boeing's commercial aircraft production and may impact the U.S. economy. If the strike lasts for a long time, nearly ten thousand Boeing suppliers spread across 50 states in the United States may face problems.

S&P Global has stated that if the strike cannot be resolved in the short term, it may delay Boeing's performance recovery and damage its credit rating. S&P and another rating agency, Moody's, have given Boeing's credit rating a level slightly above junk status at this stage.

In recent years, Boeing's stock price has experienced a significant decline. As of the time of writing, Boeing's stock price has fallen from a historical closing high of $430.35 on March 1, 2019, to a closing price of $154.58 on September 26, 2024. This means that Boeing's stock price has fallen by about 63.8% from its historical peak.

Boeing has not achieved annual profitability since 2018, which has deeply hit investor confidence.