Boeing Workers Spark Strike Over Contract Dispute Amid Financial Struggles

Boeing's West Coast factory workers initiated a strike after rejecting a proposed contract, severely impacting production and stock value. New CEO Kelly Ortberg faces challenges in navigating the crisis. The union demands higher wages, while Boeing grapples with financial instability, including significant debt. Both parties aim to resume negotiations promptly.

Boeing's factory workers on the U.S. West Coast walked off the job Friday, vehemently rejecting a contract proposal and halting production of the company's best-selling model, causing a 2% drop in shares. The strike, the first since 2008, hits as Boeing grapples with regulatory and customer scrutiny following a door panel incident on a 737 MAX jet.

Boeing's stock plummeted 2.1% on news of the strike amid leadership upheaval, as new CEO Kelly Ortberg attempts to salvage investor confidence. Though the proposed contract included a 25% pay rise over four years, the workers, represented by the International Association of Machinists and Aerospace Workers (IAM), demand a 40% increase, leading to a 94.6% rejection rate in the vote.

The prolonged strike threatens Boeing's financial stability, already strained due to $60 billion in debt. Analysts speculate that Boeing may need to meet the union's wage demands to resume operations. Immediate impacts include delayed production and potential reputational damage, affecting airlines and suppliers reliant on Boeing aircraft.

(With inputs from agencies.)