Boeing's defense unit on Tuesday halted negotiations with the machinists union that began striking on Aug. 4. Reuters reported that Boeing had no plans to restart discussions until "at least after Labor Day." The news followed the company's announcement of a deal estimated around $36 billion with Korean Air. BA stock cracked an early entry within a developing base pattern.
Boeing announced Monday that Korean Air intends to purchase 103 of Boeing's planes to modernize its fleet and support growth as the airline fully integrates operations with Asiana Airlines over the next several years. The deal, when finalized, will mark Korean Air's first order for the 777-8F and support around 135,000 jobs across the U.S., according to Boeing.
The order includes 20 777-9s, 25 787-10s, 50 737-10s and eight 777-8 freighters, Boeing said.
Boeing did not disclose financial figures for the transaction, but Reuters put the deal at about $36 billion.
Korean Air currently operates 108 Boeing airplanes, including 737s, 747s, 777s, and 787s. The airline has 72 Boeing jets on order, which will grow to 175 once Monday's deal is finalized.
The deal was signed during the Korea-U.S. Business Roundtable, which was presided over by U.S. Secretary of Commerce Howard Lutnick, and South Korea's Minister of Trade, Industry and Energy Kim Jung-kwan.
The announcement followed reports from Bloomberg last week that Boeing was close to a deal with China for up to 500 commercial jets for the country's airlines. The two sides are still finalizing specifics, including the types and volumes of jet models, as well as timetables for delivery, according to unnamed sources. The sale would mark the largest order for Boeing from China since President Donald Trump's last visit to the country in 2017.
The transaction is similar in scope to an order that China struck with Airbus earlier this year, but has yet to be announced, Bloomberg reported.
Strike Negotiations Hit Snag
Reuters quoted union officials who claimed Boeing on Tuesday walked away from negotiations with the International Association of Machinists, with no immediate plans for when to return to the table. Talks had resumed Monday for the first time since the Aug. 4 start to the strike.
Boeing said Monday it had not yet reached a deal with the union, representing 3,200 workers who went on strike at Boeing Defense's St. Louis-area facilities after rejecting a four-year contract offer in early August, following negotiations stretching back to late July. Boeing said that almost 30% of the union members did not vote on that offer.
Boeing's prior offer remained in place, with the exception of a ratification bonus. That offer includes 40% average wage growth, increases to vacation and sick leave, and a "faster path to the top of the pay scale," according to the company.
"There was no progress made today, and we're hoping to meet more during the week. The ball is in the company's court," the IAM said in a statement to local news outlets.
The workers at the facilities support Boeing's defense operations, which includes assembling the F-15, F/A-18, as well as advanced missiles and defense technologies. It marks Boeing's first defense sector union strike since 1996, Bloomberg reported at the start of the strike.
Boeing Stock Rises Early
Boeing climbed less than 1% Wednesday.
BA stock swung 3.5% higher Tuesday. That was sufficient to rupture a downward trendline and offer an aggressive early entry around 233. Boeing stock is also forming a flat base, with a potential buy point at 242.69. Shares are sticking close to their 21-day exponential moving average as the stock consolidates.
Boeing stock has jumped more than 33% so far this year.
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