This is not the way to kick off the fall production season, typically a time when companies introduce new products and plans. Boeing (NYSE: BA) could lose up to $3.5 billion per month in revenue if a threatened strike by a machinist union occurs next week, USAToday reported Friday.

The potential action by the International Association of Machinists and Aerospace Workers could also delay the 787 Dreamliner program and other aircraft programs. About 27,000 machinists in Washington state, Oregon and Kansas would be affected.

Boeing's latest contract offer calls for an 11% pay increase in annual increments of 5%, 3%, and 3%, Bloomberg News reported Friday. Machinists would also get a $2,500 payment if they approve the new contract by September 3.

Stock Analyst C. Leonard Bauer told BloggingStocks Friday Boeing "will probably have to increase its offer to the IAM, given what's at stake for Boeing."

"Boeing is in a position where it can increase its labor cost base. Revenue remains strong, with large backorders," Bauer said. "Those facts, plus the fact that Boeing can not afford any more delays in the 787 program, means the IAM has the upper hand in these contract negotiations. I'm sure the machinists don't want a strike, either, so my call would be for Boeing to up its pay raise offer to 6%, 5%, and 5% for a 16% pay increase." Bauer added that he does not have a rating on nor own shares in Boeing.

Several media outlets reported that Lehman Brothers (NYSE: LEH) will fire between 1,200 and 1,500 people, about 6% of its work force. This is not enough to have a significant impact on the firm's financials. Lehman would probably have to let 50% of its people go for that to happen.

Referring to Lehman's problems, Reuters writes: "Investors fear that write-downs of its commercial and residential mortgage assets could be large enough to dramatically reduce the company's net worth, which stood at about $26.3 billion at the end of May."

Lehman indeed faces more write-offs, probably for the next few quarters. The value of its commercial loan portfolio is almost certain to decrease by several billion dollars. It could try to sell those loans or its Neuberger Berman asset management arm, but so far nothing of the sort has happened.

What Lehman investors don't want to admit is that the value of their common shares is likely to be wiped out. The company's stock has been as low as $12, which put its market cap under $10 billion. If it has to raise another $10 billion at below market prices, the price of shares could drop below $5.

Lehman may have no good options because it really has no options at all.

Douglas A. McIntyre is an editor at 24/7 Wall St.

I'm not normally one for union-bashing, but I'm puzzled by organized labor's record of private equity-bashing. The New York Post reports that the two million member Service Employees International Union wants increased government oversight of the private equity industry, with a special emphasis on the various banks that are in desperate need of cash.

"The biggest buyout firms are used to gaming the system to turn a profit -- it's no surprise they want special rules now to take over another sector of our economy," SEIU president Andy Stern told the Post.

KKR and other buyout shops counter that the SEIU is trying to unionize employees at companies acquired by private equity, and is grasping at straws to drum up support.

That may be the case, but I can't imagine one has to do with the other. Employees should join unions (or not) because they feel (or don't feel) that their pay, job security and working conditions will benefit from membership. Bashing buyout firms would seem to be an irrelevant sideshow and a counterproductive one at that. Many union pension plans are large shareholders in banks and other firms that stand to benefit from private equity involvement, and they may be shooting their members in the foot by fighting macro issues like banking regulations that have absolutely nothing to do with their members' interests.

This story may sound quite strange to some people, as the perks at the Google campus have been known to be among the best in the industry, if not the best. But the blogosphere was abuzz after Valleywag reported on Sunday that Google Inc. (NASDAQ: GOOG) will be taking dinners off the menu. Not just that, but while breakfast and lunch will remain free, the rumor had it that there would also be "No more tea trolley. No more snack attack in the afternoon."

The initial reaction to this may be, really, this is what they're whining about? Don't they know many Americans would love to trade with them and "worry" about such things instead of worrying about paying their mortgage or losing their jobs? Why concentrate on a story of "less riches"?

Well, one possible reason this has grabbed the attention of many after all is because of the scary signal it may give. Could this be a sign that the economic hardship has reached even tech darling Google? Are there no safe havens? And with recent concern that the dollar rally could hurt Google's result, the 'no dinner' story has indeed been blown out of proportion.

Boeing (NYSE: BA) has been furiously negotiating with its machinist's union to avoid a strike vote by them that could come as early as September 3. Labor's greatest concerns is that Boeing has made a lot of money over the past several years, and workers have seen very little benefit from that.

According to Bloomberg, "The union says workers haven't had raises, except for cost-of-living increases, since 2004 and deserve to share in Boeing's $10.7 billion in profit since then." Boeing is taking the standard large company position: It cannot afford to sharply increase benefits without putting itself in jeopardy if its business slows.

Boeing might want to sharpen its pencil. A strike could cost it another delay for the launch of its new Dreamliner. It has already pushed back that date three times. Airline customers are so upset that some of them have asked for compensation. More delays could up the request for "damages" from carriers who still need the more fuel-efficient airplane.

The winner in a Boeing strike will probably be Airbus. It has had delays of some of its own products, including its huge A380 jumbo jet. But, most of those issues seem to be behind the European company. If Boeing can't deliver planes, Airbus can pick up market share.

Douglas A. McIntyre is an editor at 247wallst.com.

Airlines may not get the Boeing (NYSE: BA) Dreamliner on its new revised schedule after all. The plane has been delayed three times because of manufacturing and supplier glitches. If Boeing has problems with one of its unions, it might have to push back the launch date again. Some airlines are already asking Boeing for compensation for the late deliveries.

According to The Wall Street Journal, "With its aircraft order books so full that some customers must wait as long as five years for deliveries, Boeing can ill afford a strike -- especially one that could further delay the rollout of its new 787 Dreamliner jet."

At the center of the negotiations are pay and pensions, making them little different from most such talks. But the solution for both sides could involve an incentive.

Boeing does not want to be faced with a strike that could hurt its revenue. The unions want a bigger piece of Boeing's sales pie. Boeing should return to the bargaining table with a simple proposal. If its new jets are delivered on time, wages will go up at a rate close to the union's requests. If not, the increases will be lower.

Boeing could set up a partnership with its labor force driven by the common goal of product launches. That is better than a strike that does neither the union nor Boeing any good.

Douglas A. McIntyre is an editor at 247wallst.com.

It was a publicity nightmare for the Walt Disney Co. (NYSE: DIS): Tinkerbell, Snow White, Pinocchio, and Minnie Mouse being handcuffed and hauled away from Disneyland in a police van.

32 costumed protesters were arrested for failing to obey a police order and traffic violations on Thursday. The protest was part of a labor dispute involving 2,300 workers at Disney's hotels: the Paradise Pier, the Grand Californian and the Disneyland Hotel.

The union's contract expired in February, and workers complain that the new offer from Disney management would make health care unaffordable and, according to the president of Unite Here Local 681, workers are comparable local hotels make $2-3 an hour more. You can read the details of the dispute here.

I can't imagine that stuff like this is good for traffic at Disneyland: imagine showing up for a day of fun rides with your family, only to have your 4-year old ask why Mickey and Goofy are being hauled off in handcuffs!

A Disney spokesman told the USA Today that "Publicity stunts are not productive and are extremely disruptive to the resort district."

But won't disrupting the resort district "encourage" Disney to meet its workers' demands? If so, that sounds productive to me!

Bloomberg reports on the career struggles of former structured finance professionals who have now found themselves unceremoniously dumped on the street as the products they built wreak havoc on the global economy. According to Bloomberg, the investment world has shed 76,670 in the past year.

One former vice president in credit strategy at Bear Stearns is setting up her own company to provide birthday parties and cupcake cooking lessons for children. A Bank of New York asset backed securities trader has left the world of high finance to open a discount hair salon with his wife. Others are becoming teachers.

I'm not sure how I feel about this. Can't these washed up masters of the universe just collect unemployment and live off their investments, and leave the world alone? They've already crashed the housing market and led to hundreds of billions in write downs. Now they're going to go mess with cupcakes? Is nothing sacred?

We can take some comfort in the fact that they're taking a pay cut. Wall Street salaries averaged $399,360 in 2007. That's a lot of cupcakes and $12 haircuts.

The New York Times reports that the Federal Deposit Insurance Corporation (FDIC) is hiring back experienced people as the number of failed banks rises. Its report gives a good idea of what the FDIC does to rescue a failed bank. In a nutshell, when a bank fails the FDIC tries to find a stronger partner who can take over the foundering operations. Starting on Friday evening, the FDIC does triage so that it knows which assets and deposits the partner will get and which will go on the FDIC's books.

Here are six key steps:

• Find a merger partner. For example, the Times reports that on Friday May 9, the FDIC seized Arkansas National Bank (ANB) -- a $2.1 billion construction lender -- and arranged for it to be acquired by Pulaski Bank and Trust Company. As it usually does, the FDIC planned to use the weekend to minimize the disruption to depositors of ANB.
• Enter town quietly. FDIC personnel try not to alert the locals to their presence. The Times reports that they "used personal credit cards, rather than cards provided by the FDIC, to avoid detection." And they were told to give a false reason for their presence in town. The Times quotes Gary Holloway, a hired back retiree, who said: "If anybody asked why they were in town, they were told to say that they were with the Toy Shop on business."

The cold war between Wal-Mart Stores Inc. (NYSE: WMT) and the unions is heating up again.

Earlier this month, the Wall Street Journal reported that the world's largest retailer had warned employees that a Democratic president would back the Employee Free Choice Act, a law that would make it easier for unions to organize workers, which the company opposes. The paper now is saying that the union groups have asked the Federal Election Commission to investigate the matter, which they claim violates federal law.

Of course, this is a brilliant public relations move by the unions. First of all, the FEC is as toothless as some Wal-Mart greeters. Even if the FEC finds that Wal-Mart broke the law, the worst that the company will get is a slap -- make that a tickle -- on the wrist. That may not even happen until well into an Obama administration, which brings up my next point.

Why is Wal-Mart set to pick a fight with the Democrats? Don't the folks in Bentonville read the political tea leaves? Odds are pretty good that the country will go Blue in a big way. Maybe the company is worried that the good times reflected in today's results won't last.

Back in the good 'ol days of say 2004, Gannett Co. (NYSE: GCI) was one of the few newspaper publishers Wall Street liked. Part of the reason was that many of the papers were in smaller cities such as Wilmington, Delaware, and Poughkeepsie, NY, where competition was not as great for advertisers. These days the publisher of USA Today is up the creek with the rest of the industry.

With its shares down more than 50% this year, it should come as no surprise that Gannett is joining the ranks of publishers that are laying off staff. According to a memo leaked to the unofficial Gannett blog, about 1,000 positions will be eliminated across Gannett's Community Publishing Division. Six hundred of those employees will lose their jobs, the memo says.

"Several GCI papers have already made recent job cuts, but at a higher rate: 5%," the blog says. "The division's dailies do not include USA Today, suggesting that any further reductions at Gannett's flagship could be on top of the 1,000 jobs eliminated."

Gannett investors -- who must be the few, the proud like The Marines -- must have been expecting the move. Shares of the publisher have soared 10% in the past month. About the only relief they are going to get is through a takeover by private equity companies. The publicly traded media companies have no interest in buying into an industry whose best days are behind it.

Ever wonder what the geniuses who work at fast food restaurants do when they want to amuse themselves? How about take a bubble bath in the nude in the kitchen sink, video tape it and post it on YouTube? Welcome to Burger King's (NYSE: BKC) public relations nightmare.

It seems that this caper was the bright idea of a Burger King employee who goes by the name "Mr. Unstable." With his tattoos and punk rock hairdo circa 1985, the moniker suits him well. From what I could gather from the low-quality sound on the video, Mr. Unstable wanted to get clean for his birthday. Amazingly, none of the employees at the restaurant thought this was unusual enough to tell the manager.

In fact, they told the manager that everything was cleaned up while the video camera was rolling. I guess she was too dumb to realize something was up. The employees involved were fired. Let's hope the remainder got IQ tests.

The video made the rounds of the internet and came to the attention of the county health commissioner, who was, of course, horrified.

When a local TV station contacted Burger King about this incident, a company flack emailed the following statement:

"Burger King Corp. was just notified of this incident and is cooperating fully with the health department. We have sanitized the sink and have disposed of all other kitchen tools and utensils that were used during the incident. . . . We have also taken appropriate corrective action on the employees that were involved in this video. Additionally, the remaining staff at this restaurant is being retrained in health and sanitation procedures."

They also might add training to avoid hiring employees who call themselves "Mr. Unstable."

More bad news for Ford Motor Co. (NYSE: F). After announcing a mammoth $8.6 billion loss just three weeks ago, the company is laying off 300 workers in the Detroit area. The workers at the Romeo Engine Plant are being let go due to a steep drop in demand for vehicles which use a V8 engine that goes into a majority of Ford's trucks and SUVs. As gas prices have climbed, large truck and SUV sales have plummeted.

The layoffs start Monday, according to a Ford spokesperson. The 300 being let go are a good chunk of the 1,075 people employed at the Romeo plant. Perhaps Michael Moore should show up and film another movie.

After Ford saw an 18% drop in truck and SUV sales during the first seven months of 2008, its Way Forward plan needs to be pushed into high gear. Ford needs to make the product mix as flexible as possible to meet the changing demand arising from changing tastes and gas prices fluctuations.

This situation reminds me of Clayton Christensen's Innovator's Dilemma a bit. Instead of innovating in the supply chain and manufacturing flexibility arenas, automakers that aren't adept at near-instantaneous changes in consumer buying habits are finding out just how painful the status quo can really be.

U.S. stock futures were a little higher this morning following Friday's rally. Oil futures have been rising again due to the Russian-Georgian conflict and the dollar retracted from the five-month high set Friday. Global markets were mostly higher although China's hit a 19-month low.

Waste Management (NYSE: WMI) is expected to raise its unsolicited cash offer for rival Republic Services (NYSE: RSG) by nearly 10% to $6.73 billion, the Wall Street Journal reported.

Verizon Communications (NYSE: VZ) and two unions agreed on a new three-year contract Sunday, averting a possible strike of 65,000 workers. The new contract provides 10.5% wage increases and changes in retirement benefits.

Berkshire Hathaway (NYSE: BRK.A) reported an 8% decline in second-quarter profit after the market close Friday. The investment group attributed the decline to fewer insurance premiums and $1 billion in unrealized derivative losses.

U.S. worker productivity increased a revised 2.2% in Q2, below the consensus estimate, as companies eliminated jobs without hurting output, the U.S. Labor Department announced Friday.

Economists surveyed by Bloomberg News had expected productivity to increase 2.7% in Q2. Productivity increased 2.6% in Q1. In the past 12 months, productivity is up 2.8%.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q2 unit labor costs, a statistic adjusted for increases in efficiency, increased 1.3%. However, in the last 12 months labor costs have increased just 1.5%. Labor costs increased 2.2% and 4.7% in Q1 and in Q4 2007, respectively.

Economists surveyed by Bloomberg News had expected unit labor costs to increase 1.3% in Q2.

Q2 productivity takes some pressure off Fed

Economist Peter Dawson said the adequate Q2 2.2% productivity statistic, although below consensus, will provide argument support for doves on the U.S. Federal Reserve who want to keep interest rates as low as possible to encourage a U.S. economic recovery.

"Productivity is still rising at a healthy pace. That fact, combined will the relatively modest unit labor costs for the second quarter and year, present a picture that inflation is not getting out of control, which is good news for those seeking lower interest rates, and for business executives," Dawson said. "If these productivity and cost trends continue, hawks on the Fed are going to have a hard time making a case for an interest rate increase at the Fed's next meeting."