Boeing (NYSE: BA) has been gambling that its machinist union would back down from further wage and benefit demands. Instead, according to The Wall Street Journal, the aircraft company's largest labor union "voted to strike Wednesday night, but the union agreed to postpone a walkout for 48 hours after federal mediators urged both sides to return to the bargaining table."
If the employees walk, the delays in delivering the company's new Dreamliner flagship product could be pushed back again. The launch has already been postponed three times. Airline customers are mad enough that some are asking for compensation because Boeing has not hit its schedules.
Boeing's argument is that it cannot be saddled with high future labor costs. If its business slows down, its margins could be hurt. But the union members can read Boeing press releases. The company has a substantial back order of planes which should feed earnings for the next decade. Boeing is also saying that growth in the Chinese market could help support its business for the next twenty years.
Boeing can afford to pay the union members a bit more. It can't afford a strike.
Douglas A. McIntyre is an editor at 24/7 Wall St.











Reader Comments (Page 1 of 1)
9-04-2008 @ 12:09PM
Tony Cassa said...
Maybe Boeing management underestimated the resolve of the machinists; however, the machinists' union should not undersetimate the resolve of Boeing. Both will end up loosing and AirBus will be the winner!
Remember, use your common sense.
AFC
9-04-2008 @ 1:42PM
Tim Lowry said...
FLOCK Boeing!!!! After 15.5 years with them and being the only MBU to produce a profit(35% is what we were told) in '02 even under the Ron Woodard '92 prices for the 737, Boeing sold our plant and layed off lots o people that didn't get hired by the new company. People at the Spokane Wa, plant were given a big line of BS by the Management of the plant at the time saying there was only 1 buyer and that was it, LIES!!!!!!. So, go union workers and take all you can while you can because all of you are being fed a line of BS ten times the size we were fed in Spokane. Remember there is life after Boeing if that is the case for you, if not take all you can, they are fuc ing you daily and taking you for granted, reap the benefits with them don't let them take more or keep more than they should. Driven by greedy share holders that don't understand that without the workers they wouldn't have any dividends to share among themselves Management is making bad decisions. GO IAM 751!!!!!!!! Keep the faith all you Union Workers. Good luck from a former IAM 751 member and Boeing Employee.
9-04-2008 @ 2:02PM
Mark Hamby said...
Yeah, Tim Lowry, give them the very bad advice that was also given to GM employees. Its called, "just so I get mine". Look what has happen to the US auto unions. Their unions have killed GM, Ford and Chrysler. Well, thanks to people like you, we won't even have an auto industry...and the airliner manufacturing will be right behind it. Don't you peolpe EVER get it? The unions are just self-serving..and damn the U.S. economy.
9-04-2008 @ 2:11PM
RAY KIRBY said...
unions are industry killers
9-04-2008 @ 3:40PM
douglasfir said...
People keep blaming the fate of the American automakers on unions. Unions are a thorn in the side of corporate America.
It's not the unions that dictate engineering to design things cheaper essentially leading to cutting corners, increasing the bottom line.
Is the money saved by cheaper and cheaper labor reflected proportionately in the price of any product?
There is always going to be a source of cheaper and cheaper even cheaper labor in a global market. That's why it's being pushed.
-after companies continue to reap the rewards of cheaper and cheaper labor, who will buy the products when 90 percent of the population barely affords sustenance?
9-05-2008 @ 6:55AM
luther ferrell said...
some one union is all wayes to blam .big fat cats like crysler took millen money run taking.do not be fooled by them sand your ground
9-05-2008 @ 8:16PM
Mark Zenor said...
All organizations have good and bad sides.
If it weren't for unions do you think shareholder and corporations would give workers anything! Even no union people benefit as the companies are forced to keep some pay equity between the two workforces.
I think the anger and blame should be layed at the door of the shareholders and CEO's and politicians who worry most about profit at any cost and be re-elected at any cost when the cost is the good of the country. With out unions and the middle class there would only be the used and abused and the rich and richer.