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The Boeing (BA) factory worker strike heads into its third week, with the union reporting talks with the company have broken off. Wall Street analysts have lowered their targets for Boeing stocks, citing costs associated with the strike. Seana Smith and Madison Mills break down what you need to know.
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This post was written by Naomi Buchanan.
The union representing Boeing factory workers saying contract negotiations, quote, broke off with the manufacturing giant, pushing the strike into its third week. In a post on social media, the union said no further negotiations are scheduled, but they've remain open to talks with Boeing. So, of course, the question is what exactly happens from here? Jeffries analyst, there's a Jeffries analyst out, cutting her 2024 commercial plane deliveries as a result. Some of that because of this strike from 420 to 2 422 from 48 from 480. So basically, all this is to say that the length of this strike now being unpredictable, the baseline now assuming an early October ending. So the question of how long this is going to go on for, what exactly the economic impact is going to be for Boeing. Clearly, Boeing is in a very tough spot. It doesn't look like the union is backing down. We know they do remain pretty far apart, just in terms of pay, in terms of the willingness of Boeing to come closer to that 40% pay right pay raise that the union is seeking. They put their best and final offer, but they say forward, which would give workers a 30% raise over four years and also restore a performance bonus. But again, that wasn't enough for the union. So here we are with the strike in its third week.
Yeah, and we've been talking about that all-important jobs report coming up here on Friday. Some of the job impacts that we've seen at Boeing are not necessarily going to play out in Friday's number, but we could see a dent in November's number if they do continue. Researchers over at Oxford Economics estimating that we could see an impact of as many as 50,000 jobs. That is a huge potential headwind for those non-farm payrolls here. We know that striking workers are in the 30,000 number, and we've got furloughed workers at about 20,000 here. And what's interesting that Oxford also notes is that we could see the average hours worked number taking a hit in Friday's non-farm payrolls print, given some of the impact that we have seen for the course of the month when it comes to Boeing here. And this comes on the heels of, of course, several strikes across several companies and industries. So it's certainly going to be interesting to see kind of the geography of that jobs print coming up on Friday to indicate how much of the headline number is going to be affected by those idiosyncratic challenges, Shauna.
Yeah, that's such a good point here because we talk about, a lot of times, we focus just specifically on Boeing's impact, but again, when you take a step back and maybe what this means for the macro picture, also something investors need to be keeping in mind as well.
