Pullip Passion – Boeing has announced its plan to raise up to $35 billion (approximately IDR 541 trillion, based on an estimated exchange rate of IDR 15,465 per USD) through a combination of investor funding and bank loans. This move is aim at maintaining the company’s operations amid a strike by thousands of workers.
As reported, employees of the multinational company, which designs, manufactures, and sells airplanes, have been on strike for two months, leading to significant financial losses.
According to a report from the BBC on Friday (October 18, 2024), the strike, organized by the International Association of Machinists and Aerospace Workers (IAM) union, involves more than 30,000 Boeing workers. Thousands of employees have taken to the streets in Seattle, demanding better wages and improved working conditions.
Negotiations to end the strike broke down last week after Boeing withdrew its offer of a 30% pay increase over four years.
“The workers have made it clear that we won’t stop until a fair agreement is reach,” said an IAM representative during a protest in Seattle. “We are calling on Boeing to honor its commitment to the employees who built this company.”
Boeing plans to lay off 17,000 employees, with the first round of notices expect to be sent in mid-November. However, the company emphasize that workers participating in the strike would not be directly affect.
“These layoffs are mandatory, but we are committ to providing severance packages to those impacted,” said a Boeing spokesperson in a statement.
In addition, the production of Boeing’s latest aircraft, the 777X, has been delay by at least one year.
Boeing Stock Sale and Bank Loan Pursuit
Boeing aims to raise $25 billion by issuing new shares and debt securities, and has secured an additional $10 billion in loans from major banks.
“These are prudent steps to support the company’s access to liquidity,” Boeing said in a statement.
Boeing’s stock price rose by 2.2% following the announcement. However, a new threat looms from credit rating agencies. S&P Global warned that if the strike continues, Boeing’s credit rating could be downgrade.
“If this happens, borrowing costs will increase, which could further strain the company’s financial position,” S&P stated in its report.
Government Intervention and Political Pressure
Acting U.S. Secretary of Labor Julie Su met with IAM representatives and Boeing executives in Seattle to seek a resolution.
“The government is commit to ensuring both parties find a mutually beneficial solution,” Su said after the meeting.
Political pressure has also mounted from Democratic members of Congress in Washington state. They urged Boeing and IAM to resolve the dispute as quickly as possible.
“Both sides must double their efforts to reach a fair agreement for the workers and for Boeing’s future,” said one Democratic representative.
Boeing’s third-quarter financial report, set to be release on October 23, is expect to provide further clarity on the company’s situation.
