The New York Times answered a question I had regarding how much striking International Association of Machinists (IAM) workers will get paid during their strike. The answer is that after the first two weeks, IAM workers take a huge pay cut. And though Boeing Inc. (NYSE: BA) will lose $100 million a day during the strike, striking may be more painful for workers.

The Times reports that "if the strike goes on for more than two weeks, union members will begin drawing $150 a week in strike pay. The typical pay for a union member is $27 an hour, or about $56,000 a year before overtime and bonuses."

If my understanding is right, the workers get no pay during the first two weeks of the strike and then take an 86% cut from their normal pay each week thereafter -- excluding overtime and bonuses. (This assumes that they normally make $1,077 a week for 52 weeks a year and that the $150 a week strike pay is pretax). With the high cost of food and gasoline these days, that kind of pay cut is going to hurt IAM members.

Continue reading Low strike pay could limit length of Boeing work stoppage

Low strike pay could limit length of Boeing work stoppage originally appeared on BloggingStocks on Sat, 06 Sep 2008 14:43:00 EST. Please see our terms for use of feeds.

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."

Continue reading 27,000 Boeing workers to strike Saturday morning

27,000 Boeing workers to strike Saturday morning originally appeared on BloggingStocks on Fri, 05 Sep 2008 19:42:00 EST. Please see our terms for use of feeds.

BusinessWeek reports that Boeing Inc.'s (NYSE: BA) 27,000 workers in the International Association of Machinists (IAM) union are eager to strike and they don't want to wait. Their anger is a microcosm of all those in America who feel that they have paid the price for globalization. Unfortunately, for Boeing and IAM, there is no contract that can relieve their anger.

BusinessWeek reveals six sources of IAM worker rage:

• Requiring workers to pay more of their health care costs - Boeing "is demanding that workers pick up more of the tab for their health-care costs. Some workers argue that a few visits to the hospital would instantly eat up any wage gains," according to BusinessWeek.
• Limiting death benefits for IAM members' families - Boeing wants to "limit death benefits for survivors, giving spouses of deceased Boeing workers a flat $4,000 payment instead of guaranteed monthly payments for life," according to BusinessWeek.
• Outsourcing - Workers believe that Boeing's decision to outsource much of the work on the 787 is responsible for production delays and that the program would have gone more smoothly if they had done more of the work in the U.S.

Continue reading Why Boeing workers will strike

Why Boeing workers will strike originally appeared on BloggingStocks on Fri, 05 Sep 2008 09:45:00 EST. Please see our terms for use of feeds.

The Wall Street Journal reports that Boeing Inc. (NYSE: BA) factory workers who belong to the International Association of Machinists and Aerospace Workers (IAM) have voted to strike by a wide margin. However, thanks to the intervention of a federal mediator, the two sides have 48 hours to try to work something out. I cannot tell whether they will be able to find common ground.

Eighty-seven percent of IAM's "26,800 machinists rejected a proposed three-year contract that would have given members raises and bonuses totaling $34,000," according to the Journal. Boeing offered each union member a $2,500 signing bonus only if "the contract was ratified on the first vote." IAM's decision not to ratify costs workers that bonus. Boeing proposed an "11% pay raise over the life of the contract, as well as boosting pensions by 14% to $80 a month for each year of service. [The contract would pay the average union member] roughly $65,000 a year before overtime that averages $10,000 a year or more," according to the Journal.

IAM wants a bigger raise, more pension contributions, and lower health care payments. As the Journal wrote, IAM wants "pay raises of at least 13% and a larger pension amount. It also wants Boeing to abandon plans to have workers take on a greater share of certain health-care costs."

Continue reading Will Boeing and its workers come to terms in the next 48 hours?

Will Boeing and its workers come to terms in the next 48 hours? originally appeared on BloggingStocks on Thu, 04 Sep 2008 10:33:00 EST. Please see our terms for use of feeds.