Boeing Strike Would Hurt, but How Much?
A month-long strike would force the company to defer about $3 billion in revenue, industry consultant Scott Hamilton estimates. A month of production includes 31 Boeing 737s, seven Boeing 777s, a 747 and a 767, he says.
With most of those aircraft headed to airlines outside the U.S., that would cause an approximately 2% drop in U.S. exports -- which totaled $164 billion in June -- and would boost the trade deficit.
Additionally, a strike would further jeopardize the delivery schedule for the 787, already a source of embarrassment due to repeated delays. The first flight is now scheduled for the fourth quarter of 2008, with the initial delivery in the third quarter of 2009. Of course, future delays could be blamed on strikers.
At Northwest (NWA), the U.S. launch customer for the 787, the company is "disappointed by the continued timing slide in the delivery of our first aircraft, but have no additional news from Boeing on further delays," said spokeswoman Tammy Lee Stanoch. Northwest has orders for 18 aircraft, with the first delivery in the fourth quarter of 2009, delayed from August 2008.Nevertheless, it is clear that Boeing has calculated what the results of its "no more talks" position might be. First, although IAM workers are unlikely to approve the contract, it is possible they vote not to strike. In 2002, workers rejected a contract, but did not strike. In 2005, they walked out for 28 days. The union's constitution requires that two thirds of voters must support a strike before a walk-out. The high bar recognizes that strikes are arduous and demand a firm commitment.
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