The Boeing Company (NYSE: BA) just reached a tentative agreement with its 20,500-member engineering union, the Society of Professional Engineers in Aerospace (SPEEA). This puts to rest the labor woes that cast a shadow over the company beginning in September. On November 1, Boeing settled a 54 day strike with its 27,000 member machinists union. And today, Boeing looks like it will avert a strike with SPEEA if the parties sign a contract by December 1.

In the negotiations, SPEEA wanted a specific limit on subcontracting engineering work and Boeing wanted to make sure that contract improvements would be affordable if there was a slowdown and that it would have outsourcing flexibility to stay competitive. Boeing initially asked engineers to pay more of their health care costs and for new engineers to accept a 401(k)-style retirement plan rather than the current defined-benefit pension program.

Boeing engineers are well-paid. 13,000 of them in Washington state, Oregon, Utah and California make an average of $88,000 a year, and its 7,000 technical workers average $67,000. But SPEEA wanted more -- 10% annual raises through 2011, more vacation days, higher overtime rates, a restoration of early retiree medical benefits and changes to the health-care and pension plans.

Boeing (NYSE:BA) made a major tactical mistake by letting its machinists go on strike for weeks. It ended up giving the workers a good contract and, in the meantime, it shut down the company when its back orders for aircraft were at record levels. Of course, that upset a large number of the firm's customers who are waiting for the new fuel-efficient Dreamliner, which will be the new flagship of Boeing's fleet.

Management at Boeing does not seem to have learned a single thing from the last work stoppage and is risking another one that could further undermine its stock price and earnings.

According to The Wall Street Journal, "In an effort to ratchet up pressure on Boeing Co. negotiators, leaders of the union that represents about 21,000 of the company's white-collar engineers and technical workers said they will ask their members to authorize a strike in the event that the two sides are unable to agree on a new labor contract." Current contracts expire on December 1, so there is not much time.

Investors would think that, with such huge revenue coming in from the delivery of new planes over the next several years, that the company would do as much as possible to keep its earnings and credibility up with its largest customers intact. Management would rather get a few extra bucks in labor expense savings.

Maybe that is why Boeing's shares, at $43, are less than 50% of its 52-week high.

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

The global aircraft business sure is complex. Big companies are both suppliers and customers of each other. There are only two major competitors -- but one new one, backed by the Chinese government -- threatens to alter the structure of the industry. And aircraft are so expensive that financing is the critical fuel that keeps the industry going. Meanwhile, the global economic slowdown threatens to cut demand for air travel and slice that capital flow.

This complexity comes to mind in analyzing a General Electric Co. (NYSE: GE) threat to Boeing (NYSE: BA) -- which it leveled by placing a $750 million order for five aircraft -- with an option to buy 20 more -- with China's Commercial Aircraft Corporation of China (CACC). CACC was formed earlier this year through the merger of China's two state aircraft makers, AVIC I and AVIC. And the expansion does not stop there -- today China announced plans to acquire a foreign general aviation aircraft maker to "shore up its technology capabilities."

GE's CACC buy is hurting one of GE's biggest customers -- that's because GE Aviation sells billions worth of engines to Boeing. And GE's aircraft financing unit -- GE Capital Aviation Services -- is in competition with American International Group's (NYSE: AIG) aircraft financing unit, International Lease Finance Corp. -- which is one of Boeing's biggest customers.

Boeing Co. (NYSE: BA) shares fell after the second-largest commercial plane maker reported disappointing second quarter earnings.

Net income dropped 19% to $852 million, or $1.16 a share, from $1.05 billion, or $1.35 a share, a year earlier, the Chicago-based company said in a statement. Revenue was flat at $17 billion. The results fell short of the $1.22 profit estimate and the $17.3 billion revenue estimate of analysts surveyed by Bloomberg News.

Boeing reaffirmed its 2008 earnings per share guidance of between $5.70 and $5.85 as well as its 2009 earnings per share guidance of between $6.80 and $7.00.

"While we faced some challenges this quarter that affected our results, we remain confident in our outlook for the remainder of this year and 2009," said Chairman, President and CEO Jim McNerney in the earnings release. "Strong global demand for our products and services, a record backlog, and a sustained focus on productivity improvement and execution will continue to drive growth and profitability for this company."

Rockwell Collins Incorporated (NYSE: COL) provides flight deck avionics, aircraft electronics, and aviation simulation equipment for commercial, government and regional aircraft. The company is currently flying high. Recently released 3Q earnings indicate net income increased 19% to $174 million. EPS gained 24% to $1.07, beating Wall Street estimates by $0.05. 3Q sales increased 7% to $1.2 billion, which translated into a $12 million increase in operating cash flow to $310 million.

While many economic sectors are facing a great deal of uncertainty, Rockwell Collins has locked in a number of government and commercial contracts that will translate into steady revenue growth well into the future. Defense spending increases annually and Rockwell Collins was recently awarded contracts by BOC to equip 47 new Airbus A320s, as well as another contract from Bombardier to supply avionics for its C series commercial aircraft.

Both the Commercial Systems and the Government Systems segments increased sales 7-8%. The company spent $81 million to buy back 1.4 million shares, with another quarter billion authorized for share repurchases. In view of all the contracts in the pipeline, the company has revised and improved its FY2008 guidance. FY2008 total sales are forecast at $4.75 billion, with FY EPS in the $4.05-$4.10 range. The stock is currently trading under $47, near its 52- week low of $44.53.

The Boeing (NYSE: BA) 787 Dreamliner has been delayed three times, mostly because of problems with suppliers.The situation has gotten so bad that some of the company's customers, large airlines, say they will ask Boeing for compensation. That could cost Boeing a lot of money.

Boeing management has promised that there will be no more delays and that everyone who wants a plane will get one, on time. But, the best laid plans...

The company's large unions may stage work slowdowns. They argue that the work given to suppliers should have gone to them. They claim that delays could have been cut. Of course, now they want to delay the program further all on their own.

"Unions have the upper hand now,'' said Richard Aboulafia, an analyst with Teal Group, an aviation consulting firm in Fairfax, Virginia, told Bloomberg. "They're determined to get their share of the good times."

Boeing management now faces more criticism because its own labor force can't be held in line. The company's stock has already dropped due to the delays. First suppliers, now its own people.

The news shows that incompetent management usually stays incompetent. Boeing did not control its supply chain, and did not know it had component problems until too late. Now it will be accused of not even keeping tabs on its own unions.

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

Just when you think that the airlines have run out of ways to bleed red ink, along comes Delta Airlines Inc. (NYSE: DAL) and Northwest Airlines Corp. (NYSE: NWA).

The Atlanta-based carrier reporting a staggering loss of $6.14 billion, or $16.15 per share. Excluding a bankruptcy-related charge, Delta would have earned lost $274 million, or 69 cents per share, as fuel costs soared by $585 million compared with a year earlier. Revenue rose to $4.77 billion. Analysts had expected a loss of 51 cents on revenue of $4.6 billion, according to Thomson Financial.

"Our need to respond to the pressures of dramatically rising fuel costs and a softening U.S. economy drove us to take a closer look at all options to protect Delta's future," said Chief Executive Officer Richard Anderson in the earnings release. "The merger with Northwest will create an airline with the size, scale and global presence to weather economic downturns and compete long-term in the global marketplace."

U.S. durable goods orders fell 1.7% in February 2008, as demand for machinery dropped substantially, the U.S. Commerce Department announced Wednesday.

Economists surveyed by Bloomberg News had expected February 2008 durable goods orders to rise 0.7%. Durable goods orders decreased a revised 4.7% in January 2008. Excluding transportation, durable goods orders fell 2.6% in February 2008, the biggest decline since January 2007.

Machinery orders weigh

In February 2008, capital goods orders fell 2.6% following a 1.8% drop in January 2008, as businesses cut back purchases that enhance productivity -- historically a sign that they believe sluggish economic times are ahead. Equally telling, machinery orders plunged 13.3% in February 2008. Motor vehicle orders dropped 2.7%. Aircraft orders were a bright spot, rising 5.4%.

Shipments dropped 2.1%, the most since January 2007. Orders excluding defense equipment declined 1.6% and bookings for military gear plummeted 10%.

More bad news for U.S. economy

Economist David H. Wang told BloggingStocks Wednesday the disappointing February 2008 durable goods statistic is more troubling news for the economy.

"If we're not in a recession right now, I don't know what nation is," Wang said. "Demand is weakening and American corporations are putting off capital goods purchases on what they're seeing in the home economy, which is softer demand." Wang added that U.S. multinational corporations will continue to benefit from decent export sales, particularly to emerging markets, but domestic market-oriented companies will show "clear effects of the U.S. slowdown" in their quarterly results this year.

Investors were pleased with the earnings news from specialty metals manufacturer Allegheny Technologies Incorporated (NYSE: ATI). They bid the stock up some 6% Tuesday, January 29 despite the fact that shipments and operating profits in 4Q2007 slipped and are expected to continue to be soft in 1Q2008.

For the year, Allegheny Technologies posted record sales of $5.45 billion, up 10%. Net income shot up 30% to a record $747 million. Cash flow increased by $121 million so that the company has more cash than debt, operating profit increased by 23%, EPS hit $7.26, and international sales topped $1.5 billion, another record. As a result, Allegheny Technologies initiated a half-billion dollar stock buy-back program and raised the dividend for the third straight year.

Overall, the picture looks good, but there are some negatives. Raw material costs continue to increase. Demand for stainless steel products was "extraordinarily weak," offset in part by stronger demand for tungsten and tungsten carbide products. Demand remains strong in the commercial aerospace and defense segments which results in strong demand for titanium based products for aircraft frames. Supply chain uncertainties with the Boeing 787 Dreamliner, however, may curtail operating profits in that segment.

Given its diverse product offerings, its expanding joint centure in China, Allegheny Technologies appears able to withstand whatever the U.S. economy will do in the coming months.

Most of the momentum for aircraft sales has appeared to be with Boeing (NYSE: BA). Its 787 Dreamliner has been selling well despite a delay in launching the plane. Its new stretch 747 has also done well, as have some of the newer versions of its old planes.

Rival Airbus picked up a key piece of business when aircraft leasing company AWAS (Ireland) Ltd.decided to buy 100 of its jets. According to The Wall Street Journal the "jetliners are valued at $6.9 billion." The paper adds, "AWAS Chief Executive Franklin Pray said he was surprised how eager Airbus and Boeing had been for AWAS's business, given the strong demand."

That may get to the heart of the matter. With large production facilities going at full capacity, it is hard to say what Boeing and Airbus are actually charging for their planes. Each is fighting for market share because the demand for big aircraft is not going to stay white hot forever. And, cutthroat competition often means discounting.

When Boeing releases its earnings for the fourth quarter, it will be interesting to see whether its gross margins will stay high. The market is obviously concerned. Boeing trades at a 52-week low.

New airplanes are still selling, but at what price?

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

Bloomberg News reports that Boeing Co. (NYSE: BA) set another sales record in 2007. While it's not yet clear whether Boeing sold more than its competitor, Airbus, the 1,413 commercial jets Boeing sold last year highlight the power of effective competitive strategy.

I'm in the middle of writing a book about Boeing and have found it fascinating to examine the competition between Boeing and Airbus. In the 1990s, Airbus decided that it could beat Boeing by building the biggest jumbo aircraft on the market. By contrast, Boeing -- which was then under pressure from Airbus -- listened to the airlines and heard them say that they were facing competitive pressure from low-cost, point-to-point airlines like Southwest Airlines Co. (NYSE: LUV) -- whose strategy I analyzed in Value Leadership -- and needed mid-range aircraft that were more fuel efficient.

This post is part of our Hottest Products of 2007 feature. Also check out our other Hottest Products of 2007 posts and let us know which product you think is the greatest thing since sliced bread.

On April 30, Today Show host Matt Lauer's "Where in the World is Matt Lauer?" series took him to Everett, Washington, where he gushed about Boeing Inc. (NYSE: BA)'s latest product, the 787 Dreamliner. At the end of the segment, Lauer enthused: "I'm looking forward to flying on it and maybe taking the controls some day!"

Lauer's enthusiasm was a great example of General Electric Co. (NYSE: GE) corporate synergies: GE not only owns NBC Universal, which produces the Today Show, but its jet engine division sells to Boeing.

(Speaking of synergies, I am writing a book on Boeing and this post will help.)

But there's enough to like about the 787 Dreamliner to go around:

e-card pwn -- I don't even open e-cards anymore since the spammers adopted them as a way of invading my PC, but someecards.com has caused me to change my mind. Instead of the usual meaningless phrases like 'Thinking of you', someecards carry relevant messages, such as

• Courtesy hello -- I really enjoyed awkwardly waving at you
• Graduation -- Congratulations on getting through the easiest part of your life
• Business – Just getting on your radar because I may need something from you soon

Robot spy blimp – According to Lewis Page of The Register, the U.S. Army's $11 million order with Telford Aviation could be for the company's 30,000 cubic foot unmanned blimp, the Skybus 30K. I presume the spy blimp will be used to monitor football games and other sporting events for terrorists. You suppose the Army will offer naming rights to Goodyear (NYSE: GT)?

Spiderpig hoax – Those millions of you that have seen Fox's (News Corp, NYSE: NWS) The Simpsons Movie will remember Homer's pet, Spiderpig. Today we learn from Offbeat Enough that Oli Young, who had promised to name his second child Spiderpig if 100,000 people joined his Facebook group, has reneged on this promise. Apparently, his wife is not even pregnant, and I'm pretty sure she wasn't consulted beforehand. Spiderpig is about the only name that doesn't appear in any of the baby name books I've seen.

Fishy Spas --Thanks to Boingboing.net for a story about an ancient middle-Eastern skin treatment that has become popular in China. There, those with skin ailments are immersing themselves in pools filled with Doctor Fish, a minnow-sized fish that feeds on the affected and dead skin, in essence nibbling the patient to health. Those with really serious cases might toss in a couple of piranhas to speed the process. How long before this becomes an American fad? Are you listening, Estee Lauder (NYSE: EL)? Johnson & Johnson (NYSE: JNJ)?

Boeing Co. (NYSE: BA) today obliterated Wall Street earnings estimates, reporting a second-quarter profit of $1.1 billion, or $1.35 per share, compared with a loss of $160 million, or 21 cents, a year earlier. Revenue skyrocketed 14% to $17 billion. Analysts had expected earnings of $1.16 and revenue of $16.2 billion, acccording to Thomson Financial. It also raised its 2007 outlook. For earnings release click here, AP story click here. and Bloomberg News story click here. Detailed post to follow later.

Remember several years ago when Boeing Co. (NYSE:BA) could do no right? It was losing ground to Airbus, losing military contracts to rivals and in one corporate mishap after another. Times sure have changed.

Boeing is expected to report a strong fourth quarter on Jan. 31. Analysts expect the company to report profit of 97 cents versus 58 cents a year earlier. The company stampeded past analysts' forecast in the third quarter. The stock is up more than 10 percent in the last six months.

Last year was a great year for Boeing. The Chicago-based company got 1,044 firm orders for commercial aircraft, which likely helped it top Airbus for the first time since 2000. This performance, which was helped by demand for the 787 Dreamliner, stunned analysts, who had expected sales to SLOW DOWN, according to Reuters.

The Dreamliner is a key product for Boeing. In fact, concerns raised by an analyst about possible delays and cost overruns related to the aircraft recently sent Boeing's stock tumbling. Boeing's shares recovered after Wall Street analysts said they thought the development of the aircraft was proceeding on schedule. Deliveries are scheduled to begin next year.

The military side of the business also is humming along. In November, A Boeing-lead team beat Lockheed Martin Corp. (NYSE:LMT) for a major helicopter contract with the U.S. Air Force

How long the good times will last isn't clear. Douglas McIntyre argues that Airbus may be down, but it's far from out.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.