Boeing’s History Repeating

Photo Courtesy of AOL

If you have followed the aerospace industry for the past few decades, you are well aware the the current Boeing strike is nothing new, and it is also important to note that the Boeing strikes are typically not short, with the last three ranging time spans of 28-68 days.  If you’re unfamiliar with the situation, the union’s 27,000 members are taking advantage of the record breaking orders for the new Boeing 787 aircraft in order to leverage a more profitable payday.  And if this strike is similar to the other labor disputes in Boeing’s history, it will not be easy for both sides to come to a mutually beneficial agreement.

A key factor to note in this situation is that Boeing and their customers are not the only enterprises affected by a prolonged strike.  Each of Boeing’s suppliers are now having to put safe guards in place and cut their own production.  Prime domestic examples of this are suppliers such as:

• GE
• Spirit Aerosystems
• Honeywell
• Rockwell Collins
• Hamilton Sundstrand
• Vought Aircraft
• Goodrich
• Moog
• Hexcel

Tim Hepher, from the International Herald Tribune, said this about the situation:

“Boeing itself is cushioned by a $4.1 billion profit last year and a record $275 billion worth of commercial plane orders, but analysts say each day of the strike will shave a cent per share off its annual profits.  The machinists, Boeing’s largest union, struck for 48 days in 1989, 69 days in 1995 and 28 days in 2005.  The machinists are protesting not only Boeing’s contract offer but also what they see as plans to shift more jobs to non-union and foreign companies.  Some were angered by a union decision to allow two days of extra talks after an overwhelming strike vote.”

Considering that the past year has seen Boeing’s stock price steadily decreasing due to several production delays of its new 787 model, I think we can all be certain that the company shareholders and senior level management are motivated to end this labor dispute as quickly and efficiently as possible so as to not incur further delays.

See below for Reuter’s coverage of the strike: