The impending strike comes amid Boeing’s plan to expand its manufacturing capacity as it seeks to build the sixth generation of fighter jets for the U.S. military.
Boeing (BA) stock caught the attention of retail traders late Sunday as the planemaker braces for a workers’ strike at its fighter jet-making facilities for the first time since 1996.
Over 3,200 Boeing workers in St. Louis and St. Charles in Missouri, and Mascoutah, Illinois, voted to reject a modified four-year labor agreement with the aerospace giant, the International Association of Machinists and Aerospace Workers union said on Sunday.
“IAM District 837 members have spoken loud and clear, they deserve a contract that reflects their skill, dedication, and the critical role they play in our nation’s defense,” said union representative Tom Boelling. The previous contract had expired on July 27. The workers had already rejected another proposal last month.
Retail sentiment on Stocktwits about Boeing was in the ‘bullish’ territory at the time of writing, while retail chatter was ‘high.’
The union members manufacture and assemble fighter jets, such as the F-15 and F/A-18, as well as other critical defense programs. The strike comes at a time when Boeing is seeking to expand its manufacturing capacity in the area as it prepares to build the sixth-generation fighter jets for the U.S. military.
According to a report by the Associated Press, Dan Gillian, Boeing Air Dominance vice president and general manager, said, “We’re disappointed our employees rejected an offer that featured 40% average wage growth and resolved their primary issue on alternative work schedules.”
He added that the company is prepared for a strike and has fully implemented its contingency plan to ensure our non-striking workforce can continue to carry out their work.
One Stocktwits user said that the stock’s nearly 5% decline last week was the market pricing in the pending strike. “I’m really hoping Boeing gives a counteroffer tonight before the union strike starts tomorrow morning,” the trader added.
“I understand it’s only 3,000 union workers, but it’s just another setback for this company. They need to be firing on all cylinders, the commercial and defense units. Ortberg needs to deal with this immediately,” another user said.
Boeing stock has gained 24.5% this year, amid strong orders and stabilizing production levels. The company posted a smaller-than-expected loss for the second quarter last month, while its cash outflow also came in lower than Wall Street’s expectations.
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