Strike could cost Boeing billions

“The 737 and 777 lines are at current capacity, based on the supply chain, and for every month a strike continues, it will be that much more difficult for Boeing to catch up on deferred deliveries,’’ Hamilton said in a commercial aviation report. “There is also the possibility that the ripple effect of the strike, given the current economic environment, may result in lost sales, so it’s impossible to guess whether the revenue affected by a strike is permanently lost or eventually recoverable.’’

The strike also will impact the much-delayed 787 Dreamliner program. “There is a theory that a strike will enable Boeing to mask continuing problems with the 787 and blame delays on the strike,” Hamilton said in his report.

Boeing has set the first test flight for November and delivery for the third quarter of 2009, at least 14 months late because of parts shortages and a new assembly process. But there is  already buzz in the industry that the 787 program continues to be a challenge and that the first flight is slipping to December or even into the first quarter of next year.

“Kiss goodbye Boeing’s pledge of 25 787 deliveries in 2009,’’ Hamilton said, noting that Wall Street analysts already were predicting as few as 10 deliveries, even before the strike. “Nobody ever wins in a strike.’’

Boeing management had boasted that its “best and final” contract proposal was among the top ever offered to American workers. But union workers denounced the offer as woefully inadequate.

The company’s proposal, delivered to the union last week, would have increased pay by 11 percent on average over three years. The offer also included a $2,500 bonus for workers if the agreement was ratified.

“With Boeing making record profits, upping shareholder dividends, maintaining the share buyback plan and holding record backlogs, the unions are understandably saying, 'We want ours” and making outsourcing a big issues — particularly in light of the production problems with the 787,'’’ Hamilton says.

Labor experts say the strike could have lasting impact on the tenuous relationship between Boeing and its biggest union.

“The problem with strikes in general is that the parties will have to eventually come back together,’’ said Hugh Judd, a lecturer on labor relations at the University of Washington. “The tensions and bitterness that arise are never easy to reconcile when the parties come together. The posturing and statements that are made in the heat of the battle are not easily forgotten.”

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