Boeing could lose billions due to ongoing strike

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and why Boeing stands to lose billions during the strike.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange. Here's what we're watching on the street today.

00:04Wall Street is trading in record territory one day after the Federal Reserve cut interest rates by half a percentage point.

00:11Investors are also upbeat after policymakers indicated more rate cuts are coming before the end of 2024.

00:17Fed Chairman Jerome Powell expressed his intention to prevent a severe decline in the labor market.

00:24Fresh data released Thursday showed an unexpected drop in new claims for unemployment benefits for the week ended September 14th.

00:32In other news, the workers' strike at Boeing is only in its early days, but the company is already losing millions.

00:38According to estimates by Anderson Economic Group, the week-long walkout by more than 30,000 machinists has cost Boeing

00:45$572 million so far.

00:48The near collapse of the company's lucrative airplane manufacturing division is taking its toll.

00:53The strike means that airplanes on the production line won't be completed until it's over, and Boeing does not make any money until

01:00those planes are delivered to waiting customers.

01:03Boeing is already taking measures to preserve money since it was burning through cash even before the strike began.

01:10It had to find $8 billion in the first half of the year to cover expenses due to a drop in sales.

01:16Now, because of the strike, executives, managers and other staff members are being furloughed one out of every four weeks.

01:24Senior executives are taking a pay cut. Hiring is on ice, and so are supplier orders.

01:30Borrowing is an option, but that is likely to come at a higher cost.

01:34Boeing's credit rating is in jeopardy as this labor strike, combined with plane delivery delays due to several safety issues,

01:41cripples Boeing's financial outlook.

01:43That'll do it for your daily briefing from the New York Stock Exchange. I'm Conway Gittins with The Street.

Category

Transcript

Recommended