Boeing's West Coast factory employees went on strike early on the 13th local time, with about 33000 people participating. Xinhua News Agency quoted CNN as saying that the strike will bring Boeing's commercial aircraft production to a basic halt.
Affected by this news, Boeing (BA)'s stock price fell 3.69% on the 13th, to $156.77 per share.
First strike in 16 years
According to Xinhua News Agency, the International Federation of American Mechanical and Aerospace Workers said that union members from Boeing overwhelmingly refused to sign a four-year labor contract with the company. This strike is Boeing's first in 16 years.
Xinhua News Agency also cited Reuters to report that the Boeing employees involved in the strike were mainly responsible for producing 737 MAX and other aircraft models in the Seattle and Portland areas.
The report states that the new labor contract includes a clause for a 25% general salary increase for employees, as well as a commitment to produce the next generation of commercial aircraft in the Seattle area.
The International Federation of Mechanical and Aerospace Workers suggested that Boeing employees accept the aforementioned contract, but some employees responded angrily, insisting on an initial demand for a 40% salary increase and annual bonuses.
According to CCTV News citing CNN on the 13th, this strike will cause Boeing's commercial aircraft production to come to a basic halt and may impact the US economy. If the strike lasts for a long time, nearly 10000 Boeing suppliers across almost 50 states in the United States may experience problems. As of now, Boeing employees participating in the strike have not announced the specific duration of the strike.
Standard&Poor's Global stated that if the strike does not end in the short term, it may delay Boeing's performance recovery and damage its credit rating.
Since the beginning of this year, there have been whistleblowers exposing quality and safety control issues with Boeing's products, involving models such as the 737 MAX and 787, as well as key component suppliers such as Sharp Aviation Systems.
In the first half of this year, Boeing only received 156 aircraft orders, while the net number of aircraft orders for the same period last year was 567. According to CNN, Boeing has not achieved an annual profit since 2018 and its stock price has fallen by over 60% in the past five years.
Engineer culture gives way
According to a report by 21st Century Business Herald in July, Boeing has been criticized the most for its change in corporate orientation, with the engineer culture giving way to the profit and efficiency oriented Wall Street culture. After the 737 MAX air crash, Netflix released a documentary called "The Great Boeing Investigation," which cited many internal Boeing documents and employee interviews. Part of the senior employees who have resigned have come forward to share their experiences, stating that quality control management personnel related to flight safety have been significantly laid off, and there are occasional omissions in aircraft parts assembly. In order to reduce costs, the company has also launched a "shared value plan" internally, requiring every employee to pay attention to the company's stock price and work hard to increase stock value in order to earn more money.
Many people attribute the loss of Boeing's engineering culture to the acquisition of Boeing and McDonnell Douglas. At the end of 1996, McDonnell Douglas was already an aircraft manufacturer that had repeatedly encountered safety crises. However, after Boeing completed its acquisition, McDonnell Douglas' president took over as Boeing's president, and Boeing embarked on the "McDonnell Douglas old path" of prioritizing profit over quality.
A scholar from the Civil Aviation College of a certain 985 university in China told 21st Century Business Herald reporters that Boeing is actually facing a common problem among many large enterprises - under the professional manager system, the CEO is appointed from outside and is only responsible to the board of directors and shareholders. Even if employees discover problems, they may not be able to influence the decisions of senior management.
Meanwhile, the scholar also pointed out that unlike large-scale automated production of automobiles, aircraft manufacturing still relies on manual assembly, so people are the most prone to problems in the production line. Once employees become lax or negligent, quality control will be difficult to ensure.
In the aircraft manufacturing industry where technical workers play a key role, Boeing has lost a large number of skilled technicians in recent years, which has become an important trigger for its quality control decline.
This article combines Xinhua News Agency, CCTV News, and 21st Century Business Herald (Reporter: Lai Zhentao)