Acting US Labor Secretary intervenes to try to end Boeing standoff with union By Reuters

By Allison Lampert, David Shepardson and Tim Hepher

(Reuters) -U.S. Acting Labor Secretary Julie Su flew to Seattle to intervene in the labor dispute between Boeing (NYSE:) and about 33,000 striking workers that threatens the debt-laden company’s finances.

Her first in-person intervention, confirmed by the Labor Department on Monday, comes days after the plane maker, dealing with a crippling strike now in its fifth week, unveiled plans to cut 17,000 jobs and take $5 billion in charges.

It was not immediately clear whether Su would meet with Boeing CEO Kelly Ortberg, a source familiar with the matter said on Monday.

“Acting Secretary Su is meeting with both parties today to assess the situation and encourage both parties to move forward in the bargaining process,” a spokesperson said.

While Su has previously spoken with Boeing and the union, it is her first time in Seattle meeting with both sides in person, according to the spokesperson.

“She’s there to offer support to both parties throughout the bargaining process,” the spokesperson said.

The International Association of Machinists and Aerospace Workers was not immediately available for comment. Boeing and a White House spokesperson declined to comment.

Thousands of workers have been on strike since Sept. 13, seeking a 40% wage increase and the restoration of a defined-benefit pension they agreed to give up in 2014.

Shares in the aerospace giant fell 1% in afternoon trade following the company’s surprise after-hours announcement on Friday, which also included a new delay to the 777X jetliner and the ending of civil 767 freighter production.

Boeing will discuss job cuts this week, while formulating a plan to retain employees with essential skills, industry sources said.

The latest crisis comes as Boeing’s markets are growing and many of its rivals are scooping up scarce labour to relieve pressure on aerospace supply chains.

“The trick will be not losing the 10% of people you want to keep, which is even more important than usual in the post pandemic skill shortage environment,” said Agency Partners analyst Nick Cunningham.

The one-year delay in 777X deliveries to 2026, widely expected in the industry, confirms a six-year setback for Boeing’s 777 mini-jumbo successor due to certification and testing delays.

Emirates Airline President Tim Clark, whose initial order for 150 jets helped launch the world’s largest twin-engined jet more than a decade ago, quickly hit back at the delay.

“We will be having a serious conversation with them over the next couple of months,” he said in a rare statement on the issue of delivery delays.

He also criticized Boeing’s new timetable, citing the suspension of a certification testing milestone and the ongoing four-week-old strike.

“I fail to see how Boeing can make any meaningful forecasts of delivery dates,” he said.

Emirates is the largest user of the 777 jet family, a long-distance best-seller whose original success has been clouded by delays to its successor and the crisis engulfing Boeing’s smaller 737, a key revenue generator, over safety and quality issues.

Friday’s announcements included just over $10 billion of gross cash. Analysts said that would ease some near-term pressure but that Boeing would still need to raise money by year-end.

JP Morgan said it would also give Boeing’s management financial flexibility in its battle with the machinists union.

Reaching a deal to end the stoppage is critical for Boeing, which depends on the 737 production for much of its cash.

Ratings agency S&P has warned Boeing risks losing its prized investment-grade credit rating.

Meanwhile, U.S. Secretary of the Army Christine Wormuth on Monday said recent layoff announcements were not expected to create difficulties for their programs, which include helicopters and munitions.