Boeing (BA) Sinks On Machinists Strike; Company May Have To Pay Up
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Shares of Boeing (NYSE: BA) are down near 5% today after the company's nearly 27,000 machinists voted to strike last night, although the union agreed not to conduct a work stoppage for 48 hours during a mediation period.
The International Association of Machinists and Aerospace Workers said 80% of workers opposed the Boeing contract, which included a 11% pay raise over the next three years but rejected efforts to limit the use of outside contractors. 87% of the voting unit members approved a work stoppage.
The union said Boeing failed to meet demands for much higher wages and pensions, greater job-security and no increases in health care costs.
Boeing issued a statement following the vote, saying, "We offered employees the best package of pay and benefits in the aerospace industry. We are disappointed with the vote on the contract offer."
Peter Arment of American Technology Research estimates that a production shut down would cost Boeing over $100 million a day in deferred sales. Arment said a strike is likely to happen in the next 48 hour, but said any strike will be short-lived given Boeing's desperate need not to see the 787 slip even further. He thinks Boeing's management will pay to avoid that, as a walk-out greater than one month ensures the 787 will not be FAA certified in 2009.
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