Boeing defense workers say no to a contract offer — just days before earnings

Boeing has a lot riding on this week. Just as CEO Kelly Ortberg is trying to convince Wall Street he can pull the troubled jet maker out of its slump, more than 3,200 workers in Missouri and Illinois have voted to reject a new labor deal — putting the company on a collision course with a strike.

On Sunday, members of the International Association of Machinists and Aerospace Workers District 837 turned down a contract offer that promised a 20% pay bump over four years, along with better health care, pensions, and overtime rules, the AP reported. The plants involved build fighter jets like the F/A-18 Super Hornet and the Air Force’s Red Hawk training jet.

The current contract expired at midnight, but a built-in “cooling off” period means picket lines wouldn’t go up until August 4 if no new agreement is reached.

“Our members are standing together to demand a contract that respects their work and ensures a secure future,” the union said in a statement.

Boeing says it made its best offer

Dan Gillan, Boeing’s general manager in St. Louis, called the proposal “the richest contract offer ever presented to this union” and said the company is now preparing for a strike. So far, no new talks have been scheduled.

This labor drama comes less than a year after Boeing resolved a bruising 53-day walkout at its commercial aircraft plants, where it ultimately agreed to a 38% pay hike.

Meanwhile, Wall Street is watching

The timing couldn’t be trickier. Boeing will report second-quarter earnings Tuesday morning, and analysts are hoping for signs that Ortberg’s turnaround strategy is starting to work after a rough 2024.

Here’s what to expect:

• Revenue: Analysts forecast around $21.7 billion, up from $16.9 billion last year, when Boeing was still reeling from the Alaska Airlines 737 Max door plug blowout.
• Earnings: Losses are narrowing, but the company is still expected to post an adjusted loss of $1.40 a share and an operating loss of about $161 million.
• Cash burn: Boeing burned through $2.3 billion last quarter; that’s expected to drop to $1.8 billion this time around.

Bright spots include 150 commercial jet deliveries in Q2 (up from 130 in Q1) and 36 military aircraft. Shares have climbed more than 30% this year, helped by optimism around Ortberg’s leadership and a fresh U.S.-E.U. trade deal that spares Boeing from some hefty tariffs.

If the strike kicks off next week, production of key military jets in St. Louis could come to a halt just as Boeing is trying to rebuild momentum with investors and repair its battered reputation.