Boeing: We are ready to get back to the table and agree a deal
Boeing has declared that it is ready to return to negotiations with its worker to agree a pay deal.
In a statement issued after staff voted to strike, the company says:
The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.
We remain committed to resetting our relationship with our employees and the union and we are ready to get back to the table to reach a new agreement.
Key events
After a choppy open, Boeing’s shares are down 2% at $159.55.
Boeing shares fall after staff vote for strike
Shares in Boeing have dropped at the start of trading in New York, as investor react to the strike action underway at its factories.
Boeing’s shares are down 1.5% in early trading, to $160.53, following last night’s news that staff had voted to reject a pay deal, and to go on strike.
They are the top faller on the Dow Jones industrial average this morning.
BOEING SHARES FALL 1.5% AFTER U.S. FACTORY WORKERS STRIKE, HALTING 737 MAX PRODUCTION$BA
— *Walter Bloomberg (@DeItaone) September 13, 2024
That takes their losses so far this year to over 38%.
White House press secretary Karine Jean Pierre has said the Biden administration was in touch with both sides in the Boeing pay dispute.
She says:
“We are going to encourage both parties to negotiate in that way, in good faith and reaching a strong contract.”
Bloomberg Intelligence analyst George Ferguson predicts Boeing will “soon” make a better offer to its employees, to end the strike and get them back to work.
$BA “needs the workers right now more than the workers need Boeing,” Bloomberg Intelligence analyst George Ferguson says. “I don’t think it’s going to be a long strike because I think Boeing is going to have to go back and make their offer better, soon.” pic.twitter.com/iBEiyuYzsQ
— Yahoo Finance (@YahooFinance) September 13, 2024
Hundreds of workers manned picket lines at the Renton factory outside of Seattle that makes Boeing’s top-selling aircraft, the 737 Max, as the strike began, Bloomberg reports, adding:
“It’s been an amazing experience to be a part of this and all the camaraderie,” said Chris Solis, 19, who just celebrated his one-year anniversary at Boeing and was getting his first taste of a strike.
“We’ve heard all sorts of things from different people, but the way that the company is acting just doesn’t seem very fair.”
The Financial Times points out that the Boeing strike – which began just after midnight, Pacific time – could hurt the company’s financial postion.
The FT explains:
The strike will limit Boeing’s ability to deliver planes, slowing its cash flow after it reported an $8.3bn outflow during the first half of the year.
The company’s credit rating stands one notch above junk, and avoiding a downgrade depends on its ability to generate cash from deliveries.
UK interest rates to fall to 3% in a year, predicts Goldman Sachs
Goldman Sachs have predicted that UK interest rates will have been slashed to 3% in a year’s time, down from 5% today.
In a new research note today, Goldman analyst James Moberly forecasts that the Bank of England will reconsider its cautious approach later this year.
Moberly writes:
With Bank Rate currently well above our terminal rate forecast, we see compelling reasons for the MPC to accelerate the pace of easing as wage pressures moderate and underlying services inflation falls back.
We therefore expect the Bank to cut sequentially from November until Bank Rate reaches 3% in September 2025.
Goldman also expect the Bank will vote to leave interest rates on hold at 5% at next week’s meeting. They anticipate a 7-2 split on the monetary policy committee, with just deputy governor Sir Dave Ramsden and external member Swati Dhingra voting for a cut to 4.75%.
Julia Kollewe
PwC has said it was “disappointed by PwC Zhong Tian’s audit work of Hengda Real Estate, Evergrande’s mainland division, following this morning’s fine and ban in China (see earlier post).
This work “fell unacceptably below the standards we expect of member firms of the PwC network,” the company says.
It added that it sacked six partners; a further five staff who were directly involved in the Hengda audit work either left or were fired.
Mohamed Kande, global chair of PwC, said:
“The work performed by PwC Zhong Tian’s Hengda audit team fell well below our high expectations and was completely unacceptable. It is not representative of what we stand for as a network and there is no room for this at PwC.”
Here’s the full story:
Russia raises interest rates from 18% to 19%
Ovee in Moscow, Russia’s central bank has raised interest rates to 19%.
The Bank of Russia voted to increase its bench mark rate by one percentage point, due to concerns over high inflationary pressures.
The Bank says:
By the end of 2024, annual inflation is likely to exceed the July forecast range of 6.5–7.0%. Growth in domestic demand is still significantly outstripping the capabilities to expand the supply of goods and services.
It hopes that tightening monetary policy will reduce inflation expectations and help bring inflation down to its 4% target in 2024.
It also hints that further tightening may be needed, saying:
The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting. According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 4.0–4.5% in 2025 and stay close to 4% further on.
Jefferies analyst Chloe Lemarie has warned that production levels of Boeing’s 737 MAX jet could be hit if the strike runs for a long time.
In a research note, Lemarie says:
“The key question now is on the duration of the strike given the gap between the proposed wage increase and union members request.”
The deal rejected by Boeing employees yesterday was worth 25% over four years, and included a $3,000 signing on bonus – and a pledge to build the company’s next commercial jet in Seattle.
The company union had initially demand for pay raises of 40% over three years.
UK public’s inflation expectations fall to 3-year low
Almost half the UK public believe interest rates are too high, a new survey shows.
The Bank of England’s latest quarterly survey of public attitudes to inflation, released this morning, shows that 42% of respondents thought that interest rates should ‘go down’. That matches the reading back in May.
Just 9% of respondents think rates should ‘go up’, down from 10% in May, while 28% thought interest rates should ‘stay where they are’ (up from 24%).
The Bank’s next interest rate meeting is next week; the financial markets indicate there’s a 77% chance that rate are left on hold.
Today’s survey also found that people expect inflation to average 2.7% over the next year, down from the 2.8% expected in May [inflation was 2.2% in July]. That’s the lowest since August 2021.
Boeing workers have begun picketing outside the company’s factory in Washington, as the strike begins.
Associated Press reports:
Outside the Renton factory, people stood with signs reading, “Historic contract my ass” and “Have you seen the damn housing prices?” Car horns honked and a boom box played songs such as Twisted Sister’s “We’re Not Gonna Take It” and Taylor Swift’s “Look What You Made Me Do.”
Liam Byrne re-elected as Business & Trade Committee chair
Back in the UK, Liam Byrne MP has been re-elected as chair of parliament’s Business and Trade Committee.
Byrne also let the committee, which scrutinises the policy, spending and administration of the Department for Business and Trade and its public bodies, in the last parliament.
He says it’s a huge honour to be re-elected, adding:
MPs welcomed the hard-hitting style we pioneered in the last parliament, but, above all, the whole House wants to rebuild an opportunity economy in Britain.
“People know that the Business and Trade Committee is the key space in parliament where we can hold ministers to account and, crucially, find that overlapping consensus about the big steps our great nation needs to take to deliver the fastest growth in the G7, rebuild trade alliances with our allies and ensure that wealth is fairly shared. I can’t wait to get started.”
Byrne was pushed quite close in the voting by his fellow Labour MP, Matt Western, who also ran for the job.
Three hundred and two MPs voted for Byrne, while Western, the Labour MP for Warwick and Leamington, received 251 votes.
