Boeing Is Building 737s Faster Than It Has in Years. But Its Engineers Just Authorized an October Strike.

Boeing (NYSE:BA) is finally building 737s at a pace it has not achieved in years. The program began transitioning to a production rate of 47 aircraft per month in the second quarter, according to the company's July earnings release, and Boeing initiated initial production on a new 737 line in July. For an aerospace giant that spent early 2024 limited to 38 per month by regulators, this production ramp is notable.

But now there's something that could get in the way. On Aug. 21, the two SPEEA units representing Boeing's approximately 17,000 engineers and technical workers rejected the company's contract offers and authorized a strike by overwhelming margins. The current contracts expire at midnight on Oct. 6.

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Boeing delivered 171 commercial aircraft in the second quarter -- a 14% increase from the 150 a year earlier. And revenue rose 8% year over year to $24.6 billion.

Free cash flow (non-GAAP), meanwhile, swung to a positive $631 million from an outflow of $200 million in the same quarter a year earlier.

Of course, Boeing still does not generate positive net income. Its non-GAAP (adjusted) core loss of $0.76 per share narrowed from a loss of $1.24 a year earlier.

The balance sheet also still holds $45.9 billion in consolidated debt -- more than double the $20 billion in cash and marketable securities on hand.

Further, Boeing's order backlog hit a record $715 billion in the quarter, including over 6,200 commercial aircraft. Demand, therefore, is not the constraint. Building and delivering fast enough is. The Federal Aviation Administration limited 737 production to 38 per month in January 2024 following the door plug accident on a nearly new MAX 9. It raised the limit to 42 last October, approved the move to 47 this past spring, and Boeing began the ramp-up to that pace in the second quarter.

SPEEA members do not assemble aircraft (Boeing's factory workforce belongs to a different union). The people who just voted are engineers and technical workers, and their vote was overwhelming.

The professional unit rejected the offer with around 64% voting against it, and the technical unit with around 72%. The two units authorized a strike with approximately 88% and 90% support, according to results published by SPEEA.