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Boeing workers are already out on the picket line early this morning. You're looking at pictures of employees protesting outside the company's factory in Renton, Washington. 95% of more than 30,000 union members voted to reject a tentative labor agreement and go on strike instead. The company's first in 16 years.

Boeing has to stop breaking the law, has to bargain in good faith, and we will be back at the table whenever we can get there to drive forward on the issues that our members say are important. Congratulations, machinists.

Shares of Boeing are under pressure this morning. Here with more reaction, we want to bring in George Ferguson. He's an analyst at Bloomberg Intelligence. George, it's great to have you here. So very early when we're trying to evaluate just the financial impact that this could potentially have on Boeing. But how significant is this strike to Boeing?

Uh it's extremely significant, right? So, truly, Boeing's second half recovery is really built around delivering a lot more 737s, getting up to about eight a month by the end of the year. It's their money-making airplane, best cash generator, best profit generator. Uh so to have deliveries get shut down on that is uh is really problematic for their financials.

George, what type of difference do you think will ultimately come through in these negotiations? I mean, from what was already offered by Boeing versus where they might have to come up a little bit in the package that they're putting together.

Yeah, so I suspect that the machinists are looking at the agreement at Spirit AeroSystems, which is sort of mid-30s kind of increase. So my guess is they'll go after uh more pay. Uh I also suspect that they're looking at the uh commitment to build the next airplane in the Pacific Northwest. The the way the commitment was written, uh Boeing sort of guaranteed to the union that they would build that airplane in the Pacific Northwest if it was launched in the next four years. Um I suspect they would want maybe a bigger commitment on that. They want a commitment to launch the next 737, the 737 successor, whenever it gets launched, to build it in the Pacific Northwest. That would ensure union jobs on the most important program.

George, when it comes to the numbers here, 94% of members voted to reject the contract. 96% voted to go on strike. I bring that up because what does this, do you think, this signals about the how long this work stoppage could potentially last for, given the fact that so many of the union workers were opposed to it?

Yeah, I mean, clearly, the rank and file is not happy, right? I think it's it's just a function of a lot of the problems they've had at Boeing after over the last number of years. Uh you know, I think Boeing has really been sort of squeezing the union over the last bunch of years to try to improve financials. Uh and I think they get a sense now for what their value is to the company. Um so as far as how long it means, how long they'll be out on strike, uh I suspect it means Boeing needs to give ground here. Uh but the way I look at it is is that Boeing needs the workers right now more than the workers need Boeing. And so I don't think it's going to be a long strike, because I think Boeing's going to have to go back and and make their offer better.

And so what type what type of downstream impacts would it have if Boeing didn't ultimately net out an agreement here in the near term versus a more extended strike here, given the backups that we've already seen in some of the deliveries and and production?

Yeah, so I mean, the way Boeing's playbook has been to date is that they've been they had their suppliers building around a 31 rate, while they're trying to ramp to 38. And so you know, if you do some math in that, at some point, Boeing will absorb all the inventory. They've got like $85 billion in inventory on their balance sheet. If this persists, at some point, they'll have to tell suppliers, stop delivering, right? And so that'll have ripple effects through the aerospace supply chain. There's a lot of smaller ones, smaller companies that may have difficulty surviving at a stoppage or lower rates. And on the airline side, you know, the airlines that have taken a lot of deliveries so far this year are Southwest, Alaska, Ryanair, United. Those are the ones I expect to be most impacted on deliveries.

And and what what is the time frame that, from your assessment, you would perhaps think that uh it would take for us to get to that point?

Uh, to impact deliveries? Sure. I would say I would say impacting deliveries, you're going to know within a week, right? I I just don't see management teams going down there and getting that many airplanes, you know, completed and out to customers. So I think within a week, you're going to see them back there. Supply chain, I think they'll let that go a little longer. I think they could let it go, who knows, even a month. But they can't burn a lot of cash here, right? Boeing has a bit over $10 billion on the balance sheet. I think it's 11 something. We think they need about 10 to run the company. Probably cash burn in the third quarter already dipped them below that level. They may need to go back to capital markets and need to go back and raise either equity or debt uh so that they can shore up their finances. Debt holders won't like that, right? Their credit ratings are under pressure. Equity holders never like being diluted. Uh and so I think that means that Boeing has to, again, within two to four weeks, probably, if they don't look like they have a resolution, shut down supplier deliveries so they can really stem cash burn.

Uh George, certainly a tough start for Kelly Ortberg there at the helm. I I guess my question is, do you think he has the confidence of shareholders in order to reach a deal and reach it very timely, before we see that significant financial impact?

Uh you know, again, I think Kelly Ortberg is so early to this that he's not that much of a factor. I think the machinists are really looking past the fact that there's a new CEO. Uh they're thinking just longer-term economics for themselves. And as a shareholder, I can tell you, you know, from a person that's focused on Boeing's financials, can't really see much of an effect from either yet. So I'm not sure he's much of a factor here.

All right. Boeing releasing a statement on the outcome of the vote here, writing, quote, "We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement." It's a story we are going to continue to follow here at Yahoo Finance. George Ferguson, always great to have you. Thanks so much for hopping on with us this morning.