Financial联社 October 30 news (Editor Zhou Ziyi) On Tuesday, October 29, with the assistance of labor officials from the Biden administration, Boeing and union leaders representing 0.033 million striking workers returned to the negotiating table, reportedly holding a fruitful meeting in an attempt to end the ongoing seven-week labor dispute. This nearly two-month dispute has seriously affected Boeing's manufacturing process in the USA.

The International Association of Machinists and Aerospace Workers (IAM) stated in its latest article on its website that Boeing and the union held a productive face-to-face meeting with the assistance of Acting Labor Secretary Julie Su to resolve key negotiation issues, and "the negotiating committee will continue to engage with the company to ensure our members get the best outcome."

Boeing has also confirmed that both sides have resumed negotiations and met with union members earlier on Tuesday.

Breaking the deadlock.

The most recent negotiation broke the recent deadlock. Previously, Boeing had put forward a modified contract proposal that included a 35% wage increase over four years, plus a minimum of 4% bonus each year. However, the proposal was voted down by the union, mainly because Boeing refused to restore fixed retirement pensions.

In 2014, Boeing canceled the traditional pension plan, which left many workers dissatisfied, and this sentiment has persisted to this day. Now, workers are firmly demanding the restoration of pensions to make up for the lowest wage growth in the last 10 years.

IAM's strike is Boeing's first major labor dispute in 16 years. This strike has caused significant losses to Boeing, with the company previously estimating at an earnings call that it will consume about 4 billion USD cash in the fourth quarter, instead of generating cash, resulting in a total outflow of 14 billion USD this year.

Boeing executives also pointed out at the meeting that the aircraft manufacturer expects to continue burning cash in 2025, and its financial performance will only improve as its factories gradually recover from the shutdowns.

In addition, the strikes are also beginning to hurt suppliers, which will have a long-term impact on Boeing. After the labor dispute is resolved, Boeing's assembly lines for the 737 Max, 767, and 777 aircraft will restart, and Boeing will need to carefully assess whether these assembly lines can keep up with the pace of the supply chain.

Previously, aircraft parts manufacturer Spirit AeroSystems Holdings had warned that it would lay off about 700 workers who produce components for the Boeing 767 and 777 projects.

While addressing the strike issue, Boeing is also advancing its plan to cut 10% of its workforce, which is the first step in a broader restructuring of the company's business under the leadership of the new CEO Ortberg. Currently, the company has started to rebuild its financial reserves, and in recent days, it raised $21 billion through an expanded stock issuance to address its liquidity needs and avoid possible credit rating downgrades to junk status. It is worth mentioning that this is one of the largest stock issuances by a public company in history.