Boeing union votes to strike -- management's mistake


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.

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