Boeing's strike costs the company $1.4 billion

23 September 2008

According to a report by Dow Jones, the Boeing Company has lost a projected $1.4 billion or more in sales as of last Friday, on account of a strike by 27,000 machinists 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.

Boeing argues that it needs to be allowed to outsource in order to ensure future sales, especially sales to overseas clients who account for almost 90 per cent of its current backlog. Meanwhile, the strike has entered its third week.

All of Boeing's commercial plane production is off directly impacting delivery to airlines, shipping and leasing customers, and delaying the rollout of its 787 Dreamliner even further. Senior Boeing officials had conceded that the ongoing strike by the International Association of Machinists and Aerospace Workers means "at least a one-month delay" in the 787 programme, at the beginning of the strike.

The company also faces fines from customers over late deliveries.

At the start of the strike, it was estimated that it 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.

A week ago, Continental Airlines said Boeing was in part responsible for a $100 million shortfall in its end-of-the-quarter cash balance outlook, and said that it was expecting deliveries of new aircraft next month.