Boeing Stock In Focus As Striking Defense Workers Reject Latest Contract As 'Insult' From Execs

• Over 3,200 Boeing workers with the IAM union in St. Louis, St. Charles, Missouri, and Mascoutah, Illinois, went on strike on Aug. 4.
• Union members manufacture and assemble fighter jets, such as the F-15 and F/A-18, and work on other key defense programs.
• The five-year offer was mostly similar to the previously rejected ones by union members

Boeing’s stock (BA) was in focus on Monday after its striking defense workers rejected the planemaker’s latest contract proposal.

“Boeing claimed they listened to their employees – the result of today’s vote proves they have not,” said IAM Union International President Brian Bryant, in a statement. “Boeing’s corporate executives continue to insult the very people who build the world’s most advanced military aircraft — the same planes and military systems that keep our servicemembers and nation safe.”

How Long Have Boeing Workers Been On Strike?

Over 3,200 Boeing workers with the IAM union in St. Louis, St. Charles, Missouri, and Mascoutah, Illinois, went on strike on Aug. 4 after rejecting a modified four-year labor agreement. The union members manufacture and assemble fighter jets, such as the F-15 and F/A-18, as well as other critical defense programs.

Subsequently, the two sides have held several rounds of discussions but have not reached an agreement. While Boeing has taken steps to mitigate any production impacts, such as hiring new workers, it has delayed deliveries of F-15EX fighter jets.

What Was The Latest Boeing Proposal?

According to a Reuters report, the five-year offer was largely similar to the previously rejected offers by union members. Boeing cut the ratification bonus but added $3,000 in Boeing shares that vest over three years, along with a $1,000 retention bonus in four years. It also reportedly proposed improved wage growth for workers at the top of the pay scale in the fourth year of the contract.

The union had passed a pre-ratified proposal in September, which included employer 401(k) contributions equal to those earned by IAM Union members in the Pacific Northwest and a ratification bonus.

"We’re disappointed with the vote result," Boeing reportedly said. "We are turning our focus to executing the next phase of our contingency plan." The company has previously stated that workers’ demands do not reflect the cost of living in the Midwest.

What Is Retail Thinking?

Retail sentiment on Stocktwits about Boeing was in the ‘bearish’ territory at the time of writing.

“I can't imagine the Union labor management team likes seeing their payroll kitty dwindle with more imminent losses; they must realize Boeing is finished bargaining,” one user wrote after pointing out that the offer was rejected with a slim 51%-49% margin.

Boeing’s stock has gained 24.1% this year. The company is set to report its third-quarter earnings on Wednesday, with analysts expecting the planemaker to post another loss.

Earlier this month, Boeing received a regulatory reprieve after the U.S. Federal Aviation Administration raised the production cap for its best-selling 737 Max jets to 42 per month.

Also See: Bitcoin Breaches $116K, Ethereum Rallies Over 7% After US-China Trade Framework Deal Sets Off Risk-On Mood

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