Boeing strike the sword of Damocles for the aero industry

09 September 2008

Around 27,000 machinists at Boeing moved ahead with the third day of a strike, bringing production at Boeing's Seattle plants to a grinding halt.

The striking workers are protesting Boeing's contract offer, with their core disagreement with the aircraft company hinging around the company's plans to shift more jobs to non-union and foreign companies, according to Reuters.

This is the fourth strike in two decades by Boeing's biggest union, and comes at a bad time for the company, when airlines are reeling from unprecedented oil prices and unfavourable market and economic conditions, and have filled Boeing's order books with demand for its 787 Dreamliner.

More than 27,000 Boeing began the strike action that is likely to cost the US aerospace giant $100 million a day in lost revenue. Boeing's production lines for its 737, 747 and 777 family of aircraft have come to a halt even it, one of the world's biggest manufacturer of commercial aircraft, struggles to meet a record backlog of orders worth $275 billion. (See: Strike may cost Boeing $100 million a day)

Striking workers at Boeing's Everett, Washington plant, which employs around 13,000 members of the International Association of Machinists and Aerospace Workers (IAM), say that the strike is more about the subcontracting, rather than the money. Workers are worried about their jobs being offloaded to subcontractors, or offshore.

Boeing had proposed an 11-per cent wage increase over the three-year life of the contract, a one-time lump sum and other incentives. This did not meet union expectations of a 13-per cent wage increase, no change to healthcare contributions and the rollback of provisions allowing Boeing to outsource work.