Boeing Co. (NYSE: BA) and its engineering union have come to terms on a contract. This is good news for Boeing and its workers. Boeing can continue designing aircraft and its engineers can enjoy a raise. Considering the economic climate in which this contract was negotiated, it is a testimony to Boeing's financial prospects that it was able to increase their pay. With a $276 billion backlog, Boeing could be among the healthiest companies around.

What are the terms of the deal? Boeing employs 20,500 Society of Professional Engineering Employees in Aerospace (SPEEA) workers who are well paid already: 13,900 Boeing engineers average $88,000 annually and 6,600 technical workers make $67,000. The new contract offers 5% annual raises, higher pension payments and overtime rates, and gives workers more input concerning outsourcing decisions. But SPEEA members will pay $200 a year more for improved health care.

While this contract settlement is good news, it is less critical to Boeing's operations than the 52-day strike it settled last month with Boeing's machinists that cost $10 million a day. That's because the machinists were building aircraft before they went on strike, whereas the engineers are largely designing future ones. Nevertheless, both SPEEA and the machinists agreed to four year contracts -- a year longer than usual. This means that Boeing can now get back to work satisfying the prodigious demand for its products.

Continue reading Boeing averts engineering strike

Boeing averts engineering strike originally appeared on BloggingStocks on Tue, 02 Dec 2008 08:48:00 EST. Please see our terms for use of feeds.

Boeing (NYSE: BA) settled its seven-week old strike with machinists agreeing to a four-year contract. In the meantime, the company has lost precious time building planes including its Dreamliner, which is already over a year late for its first delivery. World airlines that have ordered the new aircraft are already in a snit.

According to The Wall Street Journal, "During the standoff, both sides dug in over issues such as job security and who had ultimate authority to run the factories, even as the national economy was undergoing a major upheaval." In other words, Boeing undercut the value of its shares when it could have settled on a similar deal a month ago. During most negotiations management knows how far it is willing to go, but holds out hoping labor will back down. In this case, that did not happen.

While Boeing management has been fiddling around, the company's stock has dropped to $42, near a 52-week low, and down from a period high of almost $99. Boeing faces angry customers, many of whom are asking for compensation for planes that will be late.

Boeing let labor shut it down while the economy went to hell in a hand-basket and its rival Airbus took whatever advantage of that it could. Boeing has a huge back-order of planes. Giving into the union would not have cost it much in profits. It has too many sales to fulfill.

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

Boeing settles strike too late originally appeared on BloggingStocks on Tue, 28 Oct 2008 07:30:00 EST. Please see our terms for use of feeds.

The fight between Boeing (NYSE: BA) and its machinists may go on a long, long time. While that may be bad for the union, it is much worse for Boeing. Its customers expect prompt delivery of fuel-efficient planes, especially the new Dreamliner. Boeing's management gambled on getting the union to knuckle under and lost.

According to The Wall Street Journal, "As far as our members are concerned, we are in this one for the long haul," said Mark Blondin, aerospace coordinator and lead negotiator for the 26,800 machinists. The statement does not sound conciliatory.

Shareholders are getting the worst of it. Boeing trades at about $57, down from a 52-week high over over $107. With delivery delays, revenue is certain to drop.

Boeing's case with the unions is weak. The company claims it cannot give machinists a good three-year deal because earnings may not be strong that far out. With the company's tremendous backlog, it would be hard to imagine that being true.

Boeing's management will not be remembered well by history. They thought they had leverage in a situation where they had almost none.

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

Boeing now regretting strike originally appeared on BloggingStocks on Thu, 25 Sep 2008 09:54:00 EST. Please see our terms for use of feeds.

Boeing

Continue reading At this rate, a Boeing strike of 'only' a month would be a moral victory

At this rate, a Boeing strike of 'only' a month would be a moral victory originally appeared on BloggingStocks on Tue, 09 Sep 2008 13:20:00 EST. Please see our terms for use of feeds.

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.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Boeing Co. (NYSE: BA) earnings prospects may have encouraged the machinist union to strike.
• Ciena Corp. (NASDAQ: CIEN) Q3 results and weak guidance led shares to a new 52-week low.
• Corning Inc. (NYSE: GLW) lowered its Q3 earnings guidance below previous and analysts' forecasts.
• Dollar Financial Corp. (NASDAQ: DLLR) beat Q4 estimates and posted record 2008 results.
• Ericsson Telephone Co. (NASDAQ: ERIC) was downgraded because it could miss Q3 earnings expectations.
• Esterline Technologies (NYSE: ESL) topped Q3 expectations due to robust aerospace and defense markets.
• Joy Global Inc. (NASDAQ: JOYG) posted strong Q3 results due to a sharp increase in orders.
• Kraft Foods Inc. (NYSE: KFT) backed away somewhat from its previous 2008 earnings guidance.
• Legg Mason Inc. (NYSE: LM) earnings prospects for the next several quarters led to an analyst downgrade.
• MEMC Electronic Materials Inc. (NYSE: WFR) mid quarter update warned of declining demand for chips.
• Navistar International Corp. (NYSE: NAV) was upgraded following a strong Q3 report.
• New York Times Co. (NYSE: NYT) ongoing losses haven't diminished Rupert Murdoch's interest in it.
• Nokia Corp. (NYSE: NOK) warned that it would miss earnings estimates due in part to weak sales.
• Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) better-than-expected Q2 led to an analyst upgrade.
• Staples Inc. (NASDAQ: SPLS) Q2 earnings slipped while revenues rose, beating expectations.
• Take-Two Interactive Software Inc. (NASDAQ: TTWO) Q3 results soared but cut its Q4 guidance.
• Tenet Healthcare Corp. (NYSE: THC) was upgraded on its prospects for beating expectations.
• Terex Corp. (NYSE: TEX) warned that earnings for Q3 and Q4 would be lower than estimates.
• Tiffany & Co. (NYSE: TIF) posted better-than-expected Q2 results and offered full-year guidance.
• Toll Brothers Inc. (NYSE: TOL) reported its fourth straight quarterly loss, but it was smaller than expected.

Also, Jim Cramer discusses a decline in earnings resulting from a collapse of oil and oil services.

Upcoming quarterly reports include Korn/Ferry (NYSE: KFY), Pep Boys (NYSE: PBY), Campbell Soup (NYSE: CPB), Krispy Kreme (NYSE: KKD), and Lululemon Athletica (NASDAQ: LULU).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Toll Bros., Take-Two, Tiffany, Staples, Kraft, Corning and others originally appeared on BloggingStocks on Sat, 06 Sep 2008 09:40:00 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.

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.

Boeing (NYSE: BA) can't take a strike. It has too much depending on the launch of its new Dreamliner. That launch has been delayed three times and carriers are already asking for compensation for their costs due to the fuel-efficient plane being behind schedule.

Boeing has been going at it with its large machinists union and it looks like the two sides have made no progress. According to Reuters, the company's "largest labor union said on Friday it advised its members to reject the company's final contract proposal and go forward with a strike this week that could cost the plane maker $3 billion a month."

Boeing's logic is that it does not want to face high costs in the future when its revenue may be lower. But that logic is deeply flawed, and the union knows it. Boeing has a heavy delivery schedule that goes out at least five years for the Dreamliner and other planes. The company also says that deliveries over the next two decades will be strong due largely to demand in Asia.

Boeing management is making a tactical error and shareholders will pay for it. The stock is at $65, but the strike will send it to $50.

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

A strike at Boeing, a mistake by management originally appeared on BloggingStocks on Tue, 02 Sep 2008 09:15:00 EST. Please see our terms for use of feeds.

Continue reading Boeing could lose $3.5 billion per month if machinists strike

Boeing could lose $3.5 billion per month if machinists strike originally appeared on BloggingStocks on Fri, 29 Aug 2008 09:25:00 EST. Please see our terms for use of feeds.

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.

A strike at Boeing? An advantage for Airbus originally appeared on BloggingStocks on Sat, 23 Aug 2008 11:40:00 EST. Please see our terms for use of feeds.

Verizon's (NYSE: VZ) talks with labor have gone past their deadline. It is clearly good news that there has been no strike. The bad news is that one could still happen. At least 65,000 telecommunications employees are covered under the agreement being negotiated.

According to Reuters, "Verizon, which has not commented on issues under negotiation, has about 103,000 workers in its telecom unit, which covers residential and small business telephone, broadband and video services."

If the workers walk, Verizon's non-cellular businesses go to hell. Installations of broadband and TV service could come close to being suspended. That means the company's ability to compete with cable TV operations practically goes away. Verizon's customer service would also suffer.

This is probably a fine time to a stay away from the company's stock. It trades at $34, near a 52-week low. A prolonged strike could push the shares below $30.

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

Verizon and unions: A shut down? originally appeared on BloggingStocks on Sun, 03 Aug 2008 06:22:00 EST. Please see our terms for use of feeds.

The list of reasons that oil is trading near $150 a barrel gets longer by the day: speculation, greed at OPEC member countries, rising consumption in India and China and so on.

Perhaps the most worrisome aspect of oil prices is supply interruptions in major exporting nations. Worries about Nigeria and Iran have helped move the cost of crude up over the last few months. Now another big threat can be put on that list.

Oil workers at Petrobras, the Brazilian oil company, have gone out on strike. Brazil is a modestly important supplier of crude, but with the recent discovery of large off-shore deposits, its role is likely to grow.

According to Bloomberg, the strike "may cut Brazilian daily oil output by more than half."

The strike raises two problems, one short term. The psychology of oil prices is so fragile now that even rumors of supply interruptions push crude up. The other, more important problem, is in the future. Brazil's new and significant oil reserves will make the world more dependent on the country for crude. If the workers can strike now to get higher wages, they can strike later. That puts Brazil's output at a level of permanent risk.

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

Brazil: Another reason for high oil prices originally appeared on BloggingStocks on Mon, 14 Jul 2008 13:14:00 EST. Please see our terms for use of feeds.

Another strike for the entertainment industry. And, it comes just as a recession threatens to cut into TV ad revenue and movie ticket sales. That is not good news for companies like CBS (NYSE: CBS), Viacom (NYSE: VIA), and Time Warner (NYSE: TWX), which already trade near 52-week lows.

Investors are understandably worried that consumer concerns could hurt entertainment spending. Who has extra money to see "Spider-Man XII"? Marketers often cut budgets for costly broadcast TV ads when the economy looks grim.

Now, the Screen Actors Guild may go on strike when its contract runs out on June 30. According to The Wall Street Journal (subscription required), "The two sides have made little progress on key issues including compensation for actors when their work is used on DVD or new media such as the Internet."

Once again, the internet comes up as the one thing entertainment companies should fear. It has been used for illegal downloads of music and movies. Many younger people would rather hang out on YouTube than watch pay-per-view movies online. Now, actors want a portion of internet revenue.

If the actors are not careful, while they are on strike and the entertainment world is shut down, the internet will eat the whole industry.

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

Big media stocks, already near lows, could get hurt by new strike originally appeared on BloggingStocks on Sun, 15 Jun 2008 10:40:00 EST. Please see our terms for use of feeds.

General Motors (GM) discloses implications of AXL strike originally appeared on BloggingStocks on Fri, 23 May 2008 13:31:00 EST. Please see our terms for use of feeds.

The three things that do the most to push up oil are weakness in the dollar, the dynamics of supply and demand, and natural disasters or manmade disturbances in the pumping of crude. Add to that, if OPEC is right, rampant and wide-spread speculation by traders.

The supply of crude out of the UK has been, for the time being, interrupted by a strike. According to Reuters, the strike over pensions began at a Grangemouth refinery in Scotland, operated by BP (NYSE: BP).

The strike raises the issue of whether Western governments should allow workers in oil fields and on pipelines to strike at all. The availability of oil and the huge jump in price to $120 makes a strong case for calling it a "strategic asset." The term has been applied to crude for many years, but it did not mean much when prices were lower and there was, at least from the standpoint of perception, ample supply.

The government of the U.S. needs to intervene and send the strikers back to work, or replace them, if necessary. Oil at $120 has as much chance of wreaking the economy as the credit crisis. The U.S., Europe, and Japan can only handle the pressure of so much commodity inflation. At some point, fighting inflation will become more important than cutting interest rates. Then, even Solomon will not be able to decide what to do.

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

More news to push up oil originally appeared on BloggingStocks on Sun, 27 Apr 2008 10:10:00 EST. Please see our terms for use of feeds.

American Axle & Manufacturing Holdings Inc

Continue reading American Axle & Manufacturing (AXL) swings to quarterly loss on strike

American Axle & Manufacturing (AXL) swings to quarterly loss on strike originally appeared on BloggingStocks on Fri, 25 Apr 2008 12:40:00 EST. Please see our terms for use of feeds.

Continue reading What is eBay doing? Well, let me tell you...

What is eBay doing? Well, let me tell you... originally appeared on BloggingStocks on Wed, 20 Feb 2008 18:20:00 EST. Please see our terms for use of feeds.

In reading of all the hoopla and viewing the pictures of rows of carefully lettered picket signs, this brain of mine keeps telling me that The Writer's Guild of America is not necessarily accomplishing exactly what it has set out to do. Yes, they may garner for their writers, producers, directors, and production people a bit of additional coin in respect of the flow of broadcast media into the internet zone, but I'm thinking that they are looking much too closely at few very picayune trees as the broad leafed forest looms glowering above them.

You see, television production people generally seem to think that the internet is an extension of their own video media world. However, if there's one thing we have learned over the past five years, it's the fact that television and the internet are two distinctly different worlds. The screenwriters and their compatriots have no corner on the market for producing acceptable media content, no matter how much they wish to believe that they do. In a thought, what they are doing with their strike right now is something akin to the habits of a trapdoor spider. That being, they have temporarily exited their lair to grasp their quarry only to withdraw back into their den with a few temporarily satisfying morsels.

Continue reading Is the Writer's Guild knuckling under more than it's creating a coup?

Is the Writer's Guild knuckling under more than it's creating a coup? originally appeared on BloggingStocks on Sat, 26 Jan 2008 09:40:00 EST. Please see our terms for use of feeds.

Hollywood awards ceremonies usually have plenty of drama -- who shows up with who, who's wearing what, celebrity feuds and, to a lesser extent, who actually wins the awards.

But the 65th annual Golden Globe awards slated for January 13th could take on a whole new level of controversy. As Hollywood's elite make their way onto the red carpet, there could be thousands of striking writers there holding signs, chanting and just generally making things very awkward. There is even speculation that the award show's broadcast could be canceled or shifted to a webcast. But labor officials say they would picket even a webcast version because Dick Clark Productions is set to produce the event.

According to the New York Times, "Panicked at the prospect of having to confront strikers as they waltz up the red carpet, celebrities have sent what Hollywood publicity executives describe as a near-unanimous signal: If striking writers show up, the stars won't."

Going for a classy private affair devoid of television cameras seems like a great way to go for the ceremony. Hollywood could avoid the potential disaster of a televised protest and an awards ceremony that isn't broadcast into every home would be kind of nice -- might actually restore some of the glamor and intrigue of the cinema.

Writers' strike could add drama to Golden Globes originally appeared on BloggingStocks on Fri, 28 Dec 2007 15:56:00 EST. Please see our terms for use of feeds.