Machinists Union Strikes, Boeing Halts Production



Boeing has reportedly halted production of 737, 747, 767 and 777 aircraft as 27,000 members of the Machinists union rejected Boeing's most recent benefits and pay raise offers. Boeing intends to keep its plants open, expecting non-machinists union workers to report in but with production stopped in Everett and Renton, Wash. Analysts expect Boeing could lose up to $3 billion per month and losses to trickle down. Suppliers will be directly affected and, depending on the duration of the impasse, airlines could see delayed deliveries and development of the 787 Dreamliner could be further delayed beyond current plans to fly it by December and deliver it in the third quarter of 2009. Airbus could theoretically step in to fill the void for needy carriers, but for some airlines it's not quite that simple. The strike represents the first time the union has taken such action in consecutive contract cycles (previously in 2005) and the shortest period between strikes. The 2005 strike lasted about 24 days and delayed delivery of more than 24 aircraft. Workers say salary increases under the latest proposal would be eroded by changes that increase health-insurance premiums. The company earned $13 billion in net profits over the past five years. Boeing says it is open to further discussion but has no date (as of Sunday) for future negotiations.


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