Strike at Boeing inevitable as talks with machinists fail

06 September 2008

Talks between the Boeing Company and its largest union ended in failure, setting the stage for a walkout at midnight.

The strike is set to halt aircraft production, and could possibly delay the 787 Dreamliner even further.

A statement on the website of the International Association of Machinists and Aerospace Workers (IAMAW) said that despite the meeting that progressed late into the night, and throughout the day, ''continued contract talks with the Boeing company did not address our issues.'' Two days back, workers had rejected Boeing's contract with leaders agreeing to delay the strike until tonight to facilitate discussion between the two sides with the help of a federal mediator.

Bad timing
The strike comes at a very bad time for Boeing, who is seeing an unprecedented order book from airlines who want newer, more fuel efficient planes in the wake of oil prices having cross $140 in past months. Sources say it could well keep the 787 Dreamliner from getting off the ground on schedule.

Analysts estimate that if the strike lasts around a month, losses could be to the tune of $2.8 billion in terms of lost revenues, and Boeing's earnings would be eroded by as much as 31 cents a share. Some industry sources also say that Boeing's offer was ''reasonable'' given the prevailing economic conditions and the projected market slowdown, and that the union's gamble is ''significant and immediate.''

The IAMAW represents around 27,000 employees in Washington state, Oregon and Kansas. These workers make parts and assemble planes for the Chicago-based aviation company, which is second only to European aviation company Airbus SAS in the commercial aeroplane market.