Written by Alison Lampert, David Shepherdson, and Tim Heffer
(Reuters) – Acting U.S. Labor Secretary Julie Su flew to Seattle to meet with Boeing and the union representing about 33,000 striking workers and urge them to bring the two sides back to the negotiating table, the company said. Sources said this on Monday.
Her intervention came days after the aircraft manufacturer, grappling with a massive strike that has entered its fifth week, announced plans for 17,000 job cuts and $5 billion in compensation.
It was not immediately clear whether Su would meet with Boeing CEO Kelly Ortberg, the person added.
The Ministry of Labor confirmed the move.
“Acting Secretary Su will meet with both sides today to assess the situation and urge both sides to move forward with the negotiation process,” the spokesperson said.
Boeing and the International Association of Machinists and Aerospace Workers could not immediately be reached for comment. A White House spokesperson declined to comment.
Shares of the debt-ridden aerospace giant fell 3% in early trading following Friday’s after-hours announcements, which also included new delays for the 777X jetliner and the end of production for the commercial 767 freighter.
Boeing has scheduled a series of internal meetings this week to develop its hiring plan, which industry officials say will be at least partially involuntary to cut costs and prevent an exodus of talent still in need of skills. There is a high possibility that the company will resort to personnel reductions.
The crisis comes at a time when Boeing’s market is growing and many rivals are raking in scarce labor to ease pressure on the aerospace industry’s supply chain.
“The trick is not to lose 10% of the talent you want to keep, which is even more important than usual in a post-pandemic skills shortage environment,” said Nick Cunningham, an analyst at Agency Partners.
The one-year delay in 777X deliveries to 2026 confirms delays that were already widely expected in the industry due to certification and testing delays. This means that the 777 mini-jumbo’s successor is scheduled to enter service six years later.
Emirates President Tim Clark, who helped launch the world’s largest twin-engine jet with an initial order for 150 planes more than a decade ago, quickly hit back.
“As a result of multiple contract defaults with Boeing, the Emirates has been forced to make significant and costly modifications to our aircraft program, and we will be in serious discussions with the Emirates over the coming months.” he said in a rare written statement for the newspaper. Problem with delivery delays.
He also expressed disdain for Boeing’s new schedule. “I don’t see how Boeing can make any meaningful predictions about delivery dates,” he said, citing the suspension of certification testing milestones and the ongoing four-week strike.
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Emirates is the biggest user of the 777 family of long-range, best-selling planes, but its initial success has been marred by delays in its successor and the dollar-shock of Boeing’s smaller 737s over safety and quality issues. overshadowed by the crisis.
Friday’s announcement included a total of just over $10 billion. Analysts said this should relieve some short-term pressure, but Boeing still needs to raise cash by the end of the year.
JPMorgan also said it would give Boeing management a little more dry powder in its fight with the mechanics union.
Reaching a deal to end the grounding is critical for Boeing, which relies heavily on 737 production for its funding.
Ratings agency S&P warned that Boeing was at risk of losing its valuable investment-grade credit rating.
The union representing the striking workers said Friday that the decision to ground the 767 cargo planes was troubling and dismissed Boeing’s claims about holding negotiations as baseless.
(Additional reporting by Abhijith Ganapavaram and Joe Brock; Editing by Christina Fincher)