Boeing stock (BA) experienced a 2% decline in after-hours trading on Friday as the company announced plans to reduce its workforce by 10%, equivalent to approximately 17,000 jobs, and postpone the initial delivery of its 777X jet to 2026 due to an ongoing worker strike.
In a message to employees posted on Boeing’s website, CEO Kelly Ortberg acknowledged the challenging position the company is in and emphasized the need for structural changes to remain competitive and meet customer demands in the long term. The job cuts will encompass executives, managers, and employees, with Boeing having around 171,000 employees as of December 2023, according to a SEC filing.
The ongoing strike by Boeing’s largest union, the International Association of Machinists and Aerospace Workers (IAM), is causing significant financial strain on the company. The strike has disrupted Boeing’s production recovery efforts, including increasing the output of its 737 Max jets to 38 per month by year-end.
Estimates from S&P Global indicate that the strike is costing Boeing approximately $1 billion per month, even after implementing cost-saving measures. S&P placed Boeing on CreditWatch Negative, raising the possibility of a credit downgrade if the strike persists, which could hinder the company’s borrowing capabilities.
Wall Street analysts anticipate that Boeing may need to raise funds through an equity offering to address the financial impact of the strike. With around $58 billion in total debt and $12.6 billion in cash at the end of the second quarter, an equity raise could be necessary to bolster Boeing’s financial position.
The article also highlights Boeing’s recent actions in response to the strike, including filing an unfair labor practice charge against IAM representatives after negotiations reached an impasse. Despite mediation efforts and revised offers, the union has not accepted the proposals, prolonging the strike.
Overall, the article underscores the challenges Boeing is facing due to the worker strike and emphasizes the potential financial repercussions if the situation is not resolved promptly. The rewritten content remains faithful to the original text while providing a fresh perspective on the developments at Boeing. sentence: Could you please rewrite the sentence?