For months, the aeronautics and defense giant Boeing (NYSE: BA) has been imploding due to what can best be described as self-inflicted wounds.
BA stock has been on a downward path, falling 6.44% in the last 30 days, 10.75% in the last six months, and 40.51% year-to-date (YTD) to a Boeing share price today, at press time, of $149.77.
One expert who has been surprisingly consistent in his bullishness for the aircraft company, even through the turbulence, is Jim Cramer.
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Here’s how much Jim Cramer’s Boeing optimism could’ve cost investors
For example, in January 2024, the analyst ensured his followers Boeing would soar again, and in November 2023, he said that this year would be ‘their year.’ Still, perhaps the most ironic comment came in April 2023, as Cramer said that the company is ‘incredible.’
Had an investor listened to the popular market analyst and invested $1,000 in BA shares that April, they would have, by October 10, 2024, found that the most incredible thing about Boeing is its downfall.
At press time, the aircraft stock is trading at lows not seen since 2022 and is 25.85% below its price on April 13. Thus, the $1,000 investment would have diminished to $741 – a $259 loss.
The prelude to Boeing’s downfall
Boeing’s woes arguably started in March 2019 with the fatal crash of Ethiopian Airlines Flight 302 – an event that not only killed all 157 aircraft occupants but showed the shortcomings of Boeing aircraft in a rather grim fashion.
Equally concerning was the Lion Air Flight 610 crash in October 2018. A similar issue with electronics caused the calamity that killed 189.
Despite the higher toll, the accident did not generate as many headlines as the 2019 catastrophe, as the Ethiopian Airlines Flight 302 carried a large number of United Nations (UN) personnel.
Finally, more recent reports have again highlighted that Boeing not only failed in quality control, but was negligent to the extent of ignoring known issues and carrier concerns.
Why is Boeing stock price collapsing in 2024?
After these tragedies, Boeing received something of a reprieve – if the class-action lawsuits are disregarded – until a non-fatal January 5 incident on Alaska Airlines Flight 1282.
The event triggered a cascading series of events for the aviation giant as it highlighted severe issues with the MAX series of aircraft – the three high-profile accidents involved these airplanes – and triggered controversy when the public became aware that Boeing CEO was paid more than $30 million in 2023 despite evidently overseeing a catastrophic drop in manufacturing quality.
The situation was only exacerbated in the coming months as more footage of Boeing aircraft suffering dangerous – though generally non-fatal – malfunctions in various stages on the ground or in the air.
Though CEO Dave Calhoun’s announced departure in March 2024 brought some hope for investors, the company soon began facing a new crisis.
The back and forth of the Boeing strike
Specifically, on July 18, Boeing workers from the International Association of Machinists and Aerospace Workers (IAM) overwhelmingly voted in favor of a strike.
These included a 40% wage increase over 3 to 4 years, new quality and safety measures made to address the growing manufacturing issues, the restoration of retirement safety that was removed in 2014, better healthcare and easing of mandatory overtime, and guarantees the next aircraft would be built in the Puget Sound region.
As the announcement and the demands made clear, Boeing workers hoped for better conditions for themselves and for measures that would help protect passenger lives.
At the time, they stated they’d prefer not to go on strike, but the strike nonetheless began on September 13 as the firm rejected the demands.
Things have only grown worse for the American aircraft company. According to the available reports, the negotiations are not going well.
By October 1, Boeing severely damaged its relations with the striking employees when it, as the union put it, axed ‘health benefits for 33,000 families while claiming they want to win back trust from workers.’
Why Boeing stock is likely to continue collapsing for months
More recently, Boeing retracted its 30% wage increase offer without having any additional negotiations planned.
The aircraft company has been reported to be losing between $50 million and $150 million each day of the strike.
Some rough estimates suggest that the demanded 40% pay would reduce the firm’s 2026 free cash flow by about $1.04 billion, while Boeing has already lost between $1.3 billion and $4 billion due to the strike.
