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The Boeing Company’s (NYSE: BA) struggles deepened Wednesday as union workers overwhelmingly rejected the company’s latest contract offer, extending a costly strike that has already lasted more than 40 days.

The International Association of Machinists and Aerospace Workers (IAM) announced that 64% of its 33,000 members voted against the proposal, which included a 35% wage increase over four years, enhanced 401k contributions, and a $7,000 ratification bonus. The key sticking point remains Boeing’s refusal to reinstate the defined benefit pension plan that workers lost a decade ago.

Boeing Strike Continues, Has Resulted in Billion of Dollars in Losses to the Firm

The strike, which began on September 12, has severely impacted Boeing’s already troubled operations. The company reported a staggering $6 billion loss for the third quarter of 2024, with revenue dropping to $17.8 billion from $18.1 billion year-over-year.

The work stoppage has resulted in an estimated $7.6 billion in total direct economic losses, including $4.35 billion for Boeing and nearly $2 billion for its suppliers. The situation escalated on October 1 when Boeing cut off employee healthcare benefits, leaving union members to rely on $250 weekly strike pay.

Adding to Boeing’s challenges, the company announced plans to lay off 17,000 workers, representing a 10% reduction in its commercial unit. The aerospace giant has been grappling with quality control and production problems across its commercial aviation operations, alongside a $2 billion loss in its defense and space business. These issues predated the current labor dispute, which shows no signs of resolution despite intervention from Acting U.S. Labor Secretary Julie Su.

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New CEO Promises Reforms to Boeing’s Culture Amid Widening Losses

New CEO Kelly Ortberg, who took the helm two months ago, acknowledged that the company is “clearly at a crossroads” and promised fundamental changes to Boeing’s culture. Ortberg’s proposed reforms include creating a leaner organization, positioning managers closer to engineering labs and factory floors, and focusing on stabilizing the business.

The market has responded negatively to these developments, with Boeing’s stock declining to $153.00 in pre-market trading Thursday at the time of writing, down 2.58% from its previous close of $157.06. The company’s financial metrics reflect its struggles, with a negative profit margin of 4.68% and a year-to-date stock return of -39.75%, significantly underperforming the S&P 500’s 21.54% gain during the same period.

Boeing’s market capitalization now stands at $97.09 billion, with total cash reserves of $12.6 billion as it faces continued uncertainty over the strike’s resolution and its broader operational challenges.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.