Investors Shrug Off Boeing's Rejected Offer, While Lockheed Martin Closes Facilities
Nov 14th 2013 4:23PM
Updated Nov 14th 2013 4:24PM
The Dow Jones Industrial Average gained 55 points today to close at a new high of 15,876.
Investors had plenty of information to digest today after it was revealed late Wednesdsay that Federal Reserve chair nominee Janet Yellen believes the economy still has room to expand and supports further bond-purchasing by the Fed. In addition to that news, U.S. jobless claims for last week fell by 2,000, and the four-week moving average of claims fell to 344,000. With those trends in mind, here are some companies making the headlines today.
Boeing investors continue to shrug off labor negotiation failures in Seattle, as the stock gained 1.4% today.
Yesterday the 31,000 local members of the International Association of Machinists and Aerospace Workers, or IAMAW, voted overwhelmingly to reject Boeing's offer of an eight-year contract extension. Boeing had strongly implied that the extension would mean Washington state would receive the airplane maker's production of its next-generation 777X. That would have secured an estimated 56,000 jobs for another two decades, and these aren't just any jobs.
"Boeing jobs are pretty good jobs, with a better than average ripple effect out across the economy," Greg LeRoy of Washington, D.C.-based policy group Good Jobs First told Seattle Times columnist Danny Westneat.
Two-third of the members of IAMAW voted against Boeing's offer, which would have required those workers to accept significant changes in their pension plan. Boeing says that concession would help keep the company competitive.
Meanwhile, Boeing rival Lockheed Martin announced today that it will close and consolidate several U.S. facilities. The move, along with corresponding "efficiency initiatives," will reduce its workforce by 4,000 positions and is a part of the company's effort to increase efficiency of its operations. This is an unfortunate by-product of a defense company faced with U.S. government moves to cut up to $1 trillion from its defense budget over the next nine years.
"Reducing our workforce of dedicated employees and closing facilities are among the most difficult decisions we make," said Marillyn Hewson, Lockheed Martin chief executive officer and president, in a press release. "In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business and will position Lockheed Martin to better serve our customers."
This has been a strategy for Lockheed Martin over the years; the company has removed 1.5 million square feet of facility space and cut 30,000 employees since 2008. Lockheed Martin will offer job placement assistance and severance benefits to aid former employees in their difficult transition. The company's stock gained 0.8% today.
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The article Investors Shrug Off Boeing's Rejected Offer, While Lockheed Martin Closes Facilities originally appeared on Fool.com.Fool contributor Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.