Workers Starting To Feel Pinch, Too

In the continuing "chicken race" between the International Association of Machinists and Boeing, analysts are beginning to express fears that the strike will last long enough to permanently damage Boeing, and tear down the last of the major manufacturing industries still alive in the US.

Boeing has an estimated order backlog of as much as seven years production, and has orders for about 900 of its new 787 Dreamliner, which is in hot demand as airlines look for ways to reduce fuel costs. But the company is also losing an estimated $100 million a day while the strike idles its plants, and there are rumblings among some customers that they may look elsewhere if delays continue to grow.

With the strike now in its seventh week, The Washington Post reports the effects throughout the economy are already showing up in the US government's trailing economic numbers. Last week, the Federal Reserve said the Boeing strike contributed to a 2.8 percent decrease in industrial production in September -- the steepest drop in 34 years. That equates to as much as one-tenth of the nation's gross domestic product.

Long-time industry consultant Wolfgang Demisch predicts the impact of the strike will be "much deeper than currently perceived... The world's airlines are on a buying spree," he said. "All of this essentially relies on sustained global peace and prosperity. It also relies on the global availability of relatively inexpensive credit."

Demisch likens the standoff between Boeing and the IAM to what happened in the US auto industry. "It seems there is no learning taking place."

The IAM is holding out for a contract which requires Boeing to allow union workers to bid first on any work before it's outsourced. Boeing spokesman Jim Proulx responds that the company cannot, "...lock ourselves into any agreement that wouldn't allow us to conduct our business in the most efficient manner possible."

It's not just government bean counters who are seeing the strike's effect on the rest of the economy. Thousands of workers at outside suppliers and contractors have been laid off or had workweeks reduced as their inventories bulge due to Boeing's shutdown. Some are reportedly burning through vacation and sick time to keep receiving full paychecks.

At Spirit AeroSystems, where composite fuselage sections for the 787 Dreamliner are stacking up on the Dreamlifter loading dock... workers have ironically rallied in support of the IAM's stand against the very outsourcing that provides their jobs. The union charges that delays in the development of the Dreamliner could have been avoided had Boeing performed that and other outsourced work in-house.

FMI: www.boeing.com, www.goiam.org, www.spirit.aero