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.