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At 3 a.m. Eastern Time tomorrow, 27,000 members of Boeing International Association of Machinists (IAM) will strike Boeing Inc. (NYSE: BA) according to Bloomberg News. As I posted this morning, IAM member anger is so deep that I was not surprised to learn that the federal mediator called in to find a solution could not avert a strike. The cost to Boeing is estimated to total $100 million a day -- reducing its earnings per share (EPS) by a penny a day.
IAM's website said, "Despite meeting late into the night and throughout the day, continued contract talks with the Boeing company did not address our issues," according to Bloomberg. And it quotes a Boeing spokesperson as saying, "We worked hard with the union and mediator. We pursued different options, but in the end we were too far apart to reach an agreement. We're open for further discussion but no talks are scheduled."
No details have emerged about whether Boeing changed the terms of its proposed contract. However, it appears likely that given the six points of disagreement about which I posted this morning, this strike could last a long time. Bloomberg quotes one Wall Street analyst who calculates that "a month-long strike would shave 31 cents a share off Boeing's EPS and cost $2.8 billion in lost revenue."
I don't know how much a month on strike would cost IAM members. But it looks this strike will be painful for both sides.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 1)
9-05-2008 @ 9:25PM
Joe Roberts said...
Do not follow the union propaganda this time, do not believe that these tactics will do no more than fatten the union leaders at your families expence. Union stewards are mostly the lasiest and mouthiest of the bunch. Remember they collect their full pay while on strike.
9-05-2008 @ 9:32PM
gary said...
Now here is a bright bunch of union workers.
Now they are out of work. So muck for the super tanker bidding. Very possible layoffs and buyouts will come in the future or as soon as the dust clears! Leave it to the unions to screw with an individuals right to work, and prevent him from finding new work. Great bunch of union officials. Of course they will continun to receive there full pay as long as there is a union. But, not the workers who will be out of a job in less than a year.
9-05-2008 @ 11:59PM
jim Martin said...
As a former boeing worker and IAM member and stockholder I can see why this is strike time. All the raises in the world wont help if Boeing keeps outsorcing your job.
9-06-2008 @ 5:21AM
douglasfir said...
Boeing has a problem of not being able to recruit experienced mechanics for this recent demand for orders (upswing).
The company is using this contract year to make changes in the starting wage for experienced mechanics and subverting it to a contract issue.
By medical take away's and also adding terminal language "Move" a function requiring less than 10 heads with minimal defining words is Kool-Aid, anybody with an ounce of sense isn't drinking.
9-08-2008 @ 7:22PM
Walt Kerr said...
Come-on Boeing Employees &Management
Let's be real.
The entire USA is in a quandary. Unemployment is at a record High.
Foreclosures are at a high, incomes are low through the US and the dollar is worth a dam in the World Market.
A deal needs to be stuck that is "Mutually Beneficial" to the Company, and ALL of it's paid employees (Executives "included") and consistent with US standards (TODAY!!). Pay for Performance NOT JUST BECAUSE YOU ARE THERE!!
The planes that are being purchased are via US Dollars for Oil from the Arabs and the Oriental countries that are making the large profits on putting OUR workers out of businesses at inflated prices (But less then we are willing to do here).
coming back to us. They are also buying up our legacy...Our Property, companies etc. Get with the TIMES it IS A REAL WORLD OUT THERE.
WE all need to tighten our belts working towards a Common Goal to save the US not Worrying about lowering our purchases to only 1 new Japanese built auto per year per family. This mentality is what has put our economy in the state it is currently in. Not to mention our "Over paid, Self-Centered, “Kick Back” and "Over-worked elected" Government (oxymoron) Representatives (Senate, House, and Executive Branch with Questionable and Biased morality and ethics.
Negotiate a Deal that is fair to the People of the USA, Washington state and you unemployed Brothers throughout the entire USA. Make the Executives accountable for their actions and "Pay for Performance" NOT JUST BECAUSE that's the way it has always been”.
The longer you would Strike, the harder it is on the Company and ALL of it’s Employees.
Negotiate Fairly and with Compassion. (Both Parties. Management and Hourly Employees)
Together We all Succeed, separate WE ALL FAIL.