Boeing (NYSE:BA) has gotten a federal mediator on board to help in its negotiations with machinists. It does so as its 787 Dreamliner's deliver date gets later and later. That will further anger customers who have lived though two delays, help rival Airbus pick up business, and allow airlines to ask for compensation for late delivery.
According to Reuters, "Production at Boeing's Seattle-area factories has been suspended since September 6 when 27,000 workers represented by the International Association of Machinists and Aerospace Workers walked off the job." Boeing wants to outsource more of its work. The union objects for obvious reasons.
Boeing should have done almost anything necessary to keep the unions in. The labor contract is for three years and Boeing has a massive backlog for that period. It is unlikely cutting a deal with workers would hurt its margins much. Delaying has almost certainly hurt its revenue and customer relations.
Boeing executives have helped take the firm's stock down 35% in the last month. Even with the market turmoil, the Dow is only off 25%. Management is responsible for that significant difference.
Douglas A. McIntyre is an editor at 247wallst.com
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Reader Comments (Page 1 of 1)
10-13-2008 @ 9:56AM
Jason said...
they did it right.. Union is asking for to much (Boeing should go to a right to work state, and not have to worry about this anymore) That is if they want to stay viable in the world today!
10-13-2008 @ 12:39PM
jason greer said...
Nice article. Although I disagree with your assessment that Boeing should have done anything to keep the unions in. Consider that the Machinist union wants a greater share of the profits, and a limit to outsourcing which could be a drain on Boeing. I agree that the company has to do what's in the best interest of its investors, internal and external customers, but the union has to meet them half way.
10-14-2008 @ 11:13AM
robo1936 said...
There is something that I have been trying find out over this Boeing issue. How much money does Boeing think it saved by outsourcing and how much will it loose through this strike and compensation payments. The loss of the good will of its customers ,unions and employees I appreciate cannot be valued but if it could I suspect it would be billions.