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Boeing has withdrawn its pay offer to striking machinists as negotiations between the aircraft maker and union members stall and the company’s debt teeters on the edge of a junk rating.

“Our team bargained in good faith,” Stephanie Pope, chief executive of Boeing Commercial Airplanes, wrote to employees in a letter released late on Tuesday. “Unfortunately, the union did not seriously consider our proposals.”

The International Association of Machinists and Aerospace Workers District 751 said in an update on its website that Boeing was “hell-bent” on sticking to its now-rescinded offer made on September 23.

On Tuesday, S&P Global Ratings put the company’s triple B minus credit and senior unsecured debt ratings on a negative credit watch. Anything below triple B minus is considered a junk credit rating.

“The CreditWatch listing reflects the increased likelihood of a downgrade if the strike persists toward the end of the year,” S&P said.

Boeing’s September 23 offer sparked fury among the 33,000 IAM members employed by the plane maker who have been on strike since September 13. The union said the 30 per cent pay increase offered by the company circumvented normal bargaining by taking the offer directly to workers.

“When we surveyed our members on that offer, the response was overwhelming — those who participated said it was not good enough,” IAM said on Tuesday.

The union added that Boeing, in its most recent negotiations, “refused to propose any wage increases, vacation/sick leave accrual, progression, ratification bonus [and] also would not reinstate the defined benefit pension”.

Pope, in withdrawing Boeing’s pay offer, said IAM “made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business”.

IAM’s original demand was for a 40 per cent pay rise, as well as improved conditions. The machinists’ pay has risen 4 per cent over the past eight years.

Boeing is struggling to improve its finances and operations after five punishing years that included two fatal crashes, a pandemic that curtailed travel demand and, most recently, an incident in which a door panel blew off one of its aircraft mid-flight.

The company has used billions of dollars in cash this year as it has slowed production to try to improve its manufacturing and quality processes. Analysts have said the company is also considering issuing equity of about $10bn to shore up its cash position.

Shares of Boeing are down about 5 per cent since the strike began on September 13.

Additional reporting by Claire Bushey in Chicago

BBC

EDF

Why so much water?

EDF

Can they stop the fish?

How to compensate?

Why have plans changed?

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President Xi Jinping’s economic planners are in sharp focus after an anticipated fiscal stimulus announcement on Tuesday failed to materialise, disappointing investors and curbing a historic rally in Chinese equities.

Expectations had been mounting that an initial round of monetary easing measures that targeted China’s depressed stock and property markets last month would be followed by fiscal spending to help encourage businesses and consumers to spend.

But the lack of further detail has left many investors and economists wondering how Beijing intends to dispel the gloom over the world’s second-largest economy.

What happened on Tuesday?

Zheng Shanjie, chair of China’s National Development and Reform Commission, the country’s economic planning agency, held a highly anticipated press briefing in Beijing, where he promised accelerated bond issuance to support the economy, front-loading about Rmb200bn ($28bn) from next year’s budget for spending and investment projects.

He also hinted at measures to stabilise the property sector, boost capital markets and fuel the “confidence” to achieve China’s economic growth target this year of about 5 per cent.

But the announcements left many investors nonplussed. Stock gains on the Hong Kong and Chinese bourses fizzled, with the Hang Seng index suffering its worst single-day fall since October 2008. The mainland CSI 300, which had soared more than 33 per cent over the past month, opened 5 per cent lower on Wednesday.

Did investors misread signs that a bazooka was coming?

The NDRC was unlikely to be the vehicle for a major stimulus announcement. A powerful state organ, it is more focused on implementation and oversight than central policy formation.

Rory Green, head of China research at TS Lombard, said there might have been an overestimation of Beijing’s immediate plans for broader fiscal stimulus following a late September politburo statement vowing stronger support.

He said the monetary stimulus, which was unveiled by the People’s Bank of China, was “pretty underwhelming” and did not reflect a change in approach to “growth by any means”. He added: “I think they’re still in the framework of stabilising rather than re-accelerating.”

Xu Zhong, head of China’s interbank market regulatory body and an influential commentator, warned investors on Tuesday not to misread the PBoC’s announcement as evidence of the central bank buying shares.

He also raised concerns about leveraged funds buying into stocks, a major feature of China’s 2015 stock market bubble. Many market watchers said Xu’s warning might have helped take the heat out of the market frenzy.

Are there signs a fiscal package is on its way?

Despite the lack of new detail from the NDRC, many observers remain hopeful that more substantive plans will be unveiled in the coming weeks. 

The commission said it was “co-ordinating with relevant departments to expand effective investment” and “fully implement and accelerate” the steps outlined by the politburo, a tone HSBC analysts said was “constructive”. They added that another “window for action” beckons when the National People’s Congress standing committee meets towards the end of October.

Goldman Sachs analysts also said “any large stimulus package may require joint efforts from many key ministries”, pointing to ad hoc meetings by the finance ministry, housing regulator and politburo, one of the Chinese Communist party’s top leadership groups.

China’s finance minister will hold a press conference on Saturday focused on strengthening fiscal policy, the government announced on Wednesday.

CreditSights analysts warned, however, that while it was “too early to rule out any additional fiscal stimulus”, the scale “may fall short of market expectations”.

What might a fiscal package look like?

Market participants have proposed a wide range of estimates, from as low as Rmb1tn to as high as Rmb10tn.

A reasonable base case, according to Citi, is about Rmb3tn this year, composed of Rmb1tn to make up for the shortfall in local government revenue, Rmb1tn for consumption-led growth and Rmb1tn to help recapitalise banks.

Green said that while refunding China’s large banks was not “particularly necessary”, it could be a beneficial step if those funds flowed into the country’s stock of thousands of smaller banks, many of which are struggling to cope with a long-running property crisis.

Nicholas Yeo, head of Chinese equities at Abrdn, stressed that the critical issue remained “not the lack of credit but the lack of demand”, highlighting that to have any lasting positive impact, any fiscal stimulus needed to result in stronger consumption.

Would it be enough to help the Chinese economy?

For much of the past four years, investors and Chinese residents have been hoping that Xi’s administration will prioritise economic growth. But it remains unclear whether fiscal stimulus can restore confidence after the damage wrought by the pandemic, the property sector meltdown and Xi’s reassertion of party control over the business landscape.

Aaditya Mattoo, World Bank chief economist for east Asia and the Pacific, said long-standing structural problems, such as a rapidly ageing population and limited social protection, were compounding the pain of falling property prices and slowing income growth, compelling Chinese households to save rather than spend. Such problems are unlikely to be addressed by the size or scope of the anticipated fiscal stimulus.

Beijing’s hesitation to do more, many analysts said, also partly reflects concern over the need to conserve firepower for a bigger stimulus if Donald Trump, who has threatened higher tariffs on Chinese exports, wins the presidency in next month’s US election.

“I do think there is some caution around the Trump factor and whether they need to be gauging the risk of a massive trade war starting next year,” Green said.

WHEN Isabella Day’s partner Ford unexpectedly died in August, she was forced to navigate running a small business and a household budget alone while grieving.

The 51-year-old goldsmith, from Devon, had worked with Ford Hallam selling hand-made gold jewellery at a store in Dartmouth and through website isabelladay.co.uk for years.

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Ford was also a skilled craftsman and could restore items such as swords, and he was the only non-native artist to have been adopted into Japan’s ancient decorative metalworking tradition.

He was 61 when he died due to complications arising from an auto immune disease, leaving Isabella stunned and heartbroken.

She told The Sun: “It was a massive shock when he died. We were engaged, due to be married in October but instead of planning a wedding, I had to plan a funeral.”

The pair had lived together as a blended family with Isabella’s two sons 16 and 25 and one of Ford’s sons, 22.

Ford had no life insurance or pension when he died, so the drop in income left Isabella’s finances and business under huge pressure, too.

Two of their sons are in full-time education and so aren’t able to contribute to the family budget, and this month the 25-year-old has just moved into his own flat.

“I was struggling emotionally and grieving but I was now also solely responsible for the business that I had with Ford,” Isabella said.

“You can’t just scale up a skilled craft business when someone else’s output is no longer there.”

Feeling desperate for help, Isabella went to Citizen’s Advice in September to see if there was any financial support she could access.

The organisation told her about the Bereavement Support Allowance.

The benefit gives lump sum payments of up to £3,500 after a partner has died, as well as ongoing payments up to £350 for 18 months.

Within days of applying, she received the payment.

“I was really surprised to find out about it, but the whole thing has been amazing – it was so easy to apply, I did it in about 20 minutes,” she said.

“And it was facts that you can manage while you are grieving, I didn’t need to go into the details of the death or anything traumatic.”

The Bereavement Support Allowance is not mean-tested and it’s available even if you are not married to your partner – though you will have had to have been living together.

You will need to be under state pension age and your partner’s National Insurance contributions will need to be up to date for you to qualify.

Isabella added: “I just wish I had known about it sooner. In hospital they give you a booklet when your partner dies, but there was no mention of this benefit.

“It’s a lot of money and made a significant difference to us.

“I think a lot of women could benefit from knowing about this support, especially small business owners. There needs to be greater awareness of it.”

What is the Bereavement Support Allowance?

If your partner dies when you are under State Pension age you could claim for the Bereavement Support Payment.

The benefit isn’t means-tested so it doesn’t matter what your income is, if you have any savings or if you’re working.

The benefit is available if you were married, but you can also claim if you and your partner were living together, and you look after a child which you get Child Benefit for.

If you have children under the or you’re pregnant, you can get a lump sum payment of £3,500, as well as monthly payments of £350 for up to 18 months.

If you don’t have children and are married, you can still get support. You’ll be entitled to a lump sum payment of £2,500, plus monthly payments of £100 for up to 18 months.

You’ll be asked for your National Insurance number as well as your partners as part of the application.

You usually need to make a claim within 21 months of your partner’s death – and in most situations you’ll need to claim within three months of death to get the full amount of payments.

You can apply for the Bereavement Support Payment by filling in a form from the gov website or calling the Bereavement Service helpline on 0800 151 2012.

If you need more help, you can contact Citizens Advice in England on 0800 144 8848. You can also talk online or find your nearest Citizens Advice at citizensadvice.org.uk.