One Week And The Boeing Strike Already Cost $572 Million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The strike at Boeing by 33,000 members of the International Association of Machinists union, which reaches its seventh day yesterday, has already cost the company and workers $572 million, according to an estimate from Anderson Economic Group.

 

And the pace of losses will climb rapidly if there’s no settlement, as soon as the second week of the strike, said Patrick Anderson, the founder and president of the Michigan research firm, which has experience estimating the cost of economic disruptions like strikes.

 

“The first week of losses for Boeing are substantial, but they’ll pale in comparison to what comes in the following weeks”, Anderson told CNN. Still, the losses are less than the $1.6 billion that Anderson estimates the first week of last year’s autoworker strikes at General Motors, Ford and Stellantis cost the economy. 

 

The strike at Boeing, on the other hand, has yet to have a measurable economic impact on airlines so far, Anderson said. 

 

Boeing CEO Kelly Ortberg told employees in an email Wednesday that the company would start furloughs of a large number of non-union workers in the coming days and that those furloughed would be off, without pay, for one week out of every four for the duration of the strike. 

 

Earlier in the week the company announced a hiring freeze as well as a halt in new orders from vendors and suppliers to save cash.

 

Boeing have a long way back to profitability no matter how long the strike lasts. They are limited in the rate they build 737 Max jets, as the FAA oversee efforts to improve the quality of their assembly line.

 

Boeing’s next planned jet, the 777X, which is crucial to a return to profitability, ran into trouble on its test flights and is years overdue in being certified to carry passengers. Boeing have not had the cash they need to develop a new model jet to serve the market, and their sales have fallen far behind rival Airbus. 

 

The company's only non-union factory, located in South Carolina, continue to build the 787 Dreamliner. But while that plane is the company’s most expensive aircraft, the factory have only produced 32 of the jets in the first eight months of the year, or as many of their best-selling 737 Max jets as they have built every month in their most recent months. The Max, as well as two freighter models, the 777F and 767F, are built in unionized plants shut down by the strike. 

 

Boeing's seemingly endless stream of travails mean they are sinking very deep into the abyss!