Boeing Co. and its largest union exchanged harsh words on Friday over the latest round of failed contract negotiations. The talks were associated with building the 777X model in the Washington state commercial base of the company. Boeing announced that it is considering proposals from 22 states, all of which are interested in manufacturing the jetliner in question.
The industrial planners of the company are currently reviewing proposals in order to choose the most appropriate state to become home to 777Xs final assembly and its carbon-fibre composite wings. Such a deal could provide up to 8,500 aerospace jobs. The bids were submitted by the states on Tuesday and the competition is more fierce than ever.
Boeing is looking forward to making a final decision on the matters associated with the commercial bases location until the first months of 2014. All possible locations will probably be discussed at an upcoming Boeing board meeting. This provoked one of the companys most serious battles with organized labour in the last few years.
On November the 13th, members of the International Association of Machinists and Aerospace Workers voted overwhelmingly to reject Boeings initial offer to extend their existing contracts from 2016 to 2024. it became clear that the offer required serious concessions in return to guaranteeing the location where the 777X model would be built.
Still, the negotiations were resumed this week. The unions proposal was issued on Wednesday, and Boeings counterproposal was made on Thursday. The company agreed to keep an existing wage structure, which is a key factor to many members of the union. Unfortunately, the local leadership of the latter rejected the counterproposal, explaining it was “almost identical” to the first one.
The counterparts discussed whether or not the offer was still available for the members, because many of them made it clear they wanted to be given the opportunity to vote on the deal no matter what the leaderships point of view was.
The company once again suggested capping the existing pension system in 2016 and shifting to a 401(k)-style system. These aspects of the offer were seriously criticized before by members. However, the fact that Boeing has agreed to stick to the current wage structure is not to be underestimated. The company also offered an additional 5,000-dollar bonus for members in case the new contract is ratified, which would be provided in 2020.
On the New York Stock Exchange, Boeing Co.s shares settled 0.65% higher on Friday to reach $133.83 per share, lifting its one-year return rate to 84.42%.
The 21 analysts offering 12-month price forecasts for Boeing Co. surveyed by CNN Money have a median target of $145.00. with a high estimate of $175.00 and a low of $134.00. The median estimate represents an 8.35% increase from the last closing price of $133.83.