Boeing HQ
The IAM strike, and its impacts, are the key news items today. The striking workers recognize that they have Boeing over a barrel, as the company’s financial difficulties make a protracted strike unsustainable. Boeing has already lost more than $571 million since the beginning of the strike, and at that rate, further losses are unsustainable.
Boeing can’t take on any additional debt without a credit rating downgrade, and will need an equity injection to raise cash. The union is betting on Boeing’s financial weakness as a tool it could leverage in negotiations, much as the last Boeing contract took advantage of the unions weak bargaining position.
An editorial in Bloomberg Law suggests that Boeing needs to emulate UPS and pay the striking employees to get back to business sooner rather than later. If cultural change and establishing trust with the union is a goal, Boeing may have already squandered the opportunity by publicizing a ‘best and final’ offer that was seen as a snub of union leadership. That made cultural change and smoother labor relations more difficult. Boeing had an opportunity to bring labor onto the team for cultural change and building safe airplanes, but may have already blown that opportunity.
The impact of the strike is clearly global, impacting the supply chain and customers as well as Boeing. Asian airlines are concerned about late plane deliveries that may upset their schedule plans. Nobody wins during a strike, from the supply chain to customers and passengers.
The two sides will return to the negotiating table today. But the outlook right now doesn’t look good for a quick solution to the dispute give the years of animosity between the parties.
Links to today’s key stories follow:
- Striking machinists bet Boeing can’t fix itself without them – Bloomberg Law
- Boeing strike leaves Asian airlines sweating on plane deliveries – BNN Bloomberg
- Southwest Airlines to sell planes as growth plans falter in strategic move to slash costs – VFTW
- The 737 production standstill impact is global – AirInsight
- Boeing needs to take cue from UPS and pay strikers: Thomas Black – Bloomberg Law
- Boeing, striking union to resume contract talks on Friday – RTE
