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• Contingency plan for 4-12 week strike.

 By the Leeham News Team

Analysis

Sept. 5, 2024, © Leeham News: There seems to be quite an expectation that there will be a strike by Boeing’s touch labor union, the IAM walkout at Boeing this contract cycle.   The costs associated with a strike are well understood. Crippled cash flow, upset customers, and stock price losses not counting the damage to the companies in Puget Sound that built much of their business models on Boeing worker's paychecks. It's never a good thing to sustain a strike of any duration because the disruptive effects can last for years.

The last time the IAM struck was in 2008, for 57 days. The strike cost Boeing billions of dollars in lost revenue, much of which was made up in the following years. The ill-will generated by the strike affected customers. Management-labor relations remain strained to this day. Union leadership is determined to recover previous givebacks in wages and benefits. They want a seat on the Board of Directors, a role in improving Boeing’s safety culture, and a guarantee that the next airplane will be assembled in Puget Sound.

Talks remain far apart, according to the union. Boeing says progress is being made. A strike seems likely at this stage.

Boeing is clear about a strike potential. In a message last week to employees, Boeing said:

Does Boeing want a strike so it can stabilize production or allow time for the supply chain to recover?
Absolutely not. Any work stoppage, whether days, weeks or months, would disrupt our production system, supply chain and most importantly, our customers. When Boeing cannot deliver airplanes as scheduled, customers question our reliability. A strike would only help the competition and hurt our suppliers.

What is Boeing supposed to do if the IAM walks out?  The usual answer is sweeping and cleaning and trying to deliver whatever you can sneak out the door to keep the money coming in.  It is never a very effective way to operate.

Here are some points to ponder if the strike occurs and Boeing production shuts down.