Boeing Hardens Tone With Union, Laments ‘Bad Faith Bargaining’

With the paralyzing labor strike now running for a full four weeks, Boeing Co. is taking a harder line with union representatives by filing unfair labor practice charges, saying the other side has bargained in bad faith and undermined its own deal.

The US planemaker said it decided to “reluctantly” to file the charges in response to the International Association of Machinists and Aerospace Workers leadership’s own legal filings, seeking to provide an “an accurate picture of the events of the past few weeks,” according to a statement late Thursday. The union has said it’s willing to talk, though Boeing “needs to meet us at the table.”

Negotiations have been choppy for the past two weeks, going from little contact for an extended period to a brief resumption at the start of this week — only to collapse again and have Boeing retract its latest proposal. The stakes are high for both sides — Boeing’s finances are increasingly strained, while workers are no longer receiving paychecks or company-backed health-care benefits.

The union has urged Boeing Chief Executive Officer Kelly Ortberg to insert himself more directly into the process. The CEO, who took over in mid-August following a management shakeup, has asked employees to embrace a deal, though much of the public communication has been left to Stephanie Pope, the head of Boeing’s commercial-aircraft business.

The strike has devastated production of Boeing’s crucial 737 airliner. The company reports earnings on Oct. 23, and investors are bracing for another outflow of cash that’s brought Boeing dangerously close to losing its investment-grade credit rating.

Read More: Boeing Would Be Biggest-Ever US ‘Fallen Angel’ If Cut to Junk

Compounding the company’s woes, its defense and space subsidiary is also losing money, heightening the urgency for Boeing to resolve the labor dispute and get production of its cash-cow aircraft back up.

Boeing’s latest offer included a 30% wage increase, alongside other benefits. That’s up from the 25% that was initially on the table and also backed by unions, only to be turned down overwhelmingly in a strike vote in mid-September.

Since then, 33,000 workers in the Seattle area have downed tools, demanding a wage hike closer to 40% as well as the reinstatement of a more favorable pension plan — something that Boeing has said is a red line in its negotiations.

To contact the reporter on this story:
Benedikt Kammel in Berlin at bkammel@bloomberg.net

To contact the editors responsible for this story:
Benedikt Kammel at bkammel@bloomberg.net

Katrina Nicholas

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