Boeing union rejects company offer, votes to strike

SEATTLE, Sept 3 (Reuters) - The International Association of Machinists, Boeing Co's (BA.N: Quote, Profile, Research, Stock Buzz) largest labor union, said on Wednesday that its members rejected the plane maker's latest three-year contract offer and voted to walk off their jobs at midnight.

strike on hold for 48 hours as mediator steps in.

Quote:

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Nearly 27,000 Boeing workers will start a strike that will cost the company about $100 million in revenue per day as customers' planes sit idle on the production lines.

The International Association of Machinists and Aerospace Workers (IAM), mostly based in Boeing's commercial plane plants in the Seattle area, said 87 percent of its members voted to strike and 80 percent rejected Boeing's "best and final" offer.

At least two-thirds of its members needed to vote to strike. (Reporting by Laura Myers; Editing by Kim Coghill)

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http://seattletimes.nwsource.com/html/n ... ng040.html

This is just another blow for the 787 program.

It's going to be expensive for Boeing for certain. But, it might actually not be as bad as one initially thinks.

http://www.fool.com/investing/value/200 ... -walk.aspx

Summary:

- "by standing pat, Boeing preserves credibility". Can't come back with a 2nd best and final offer after making the first one.

- Invocation of "force majeure" clause in contracts to deliver Dreamliner (due to strikes) - thereby saving millions in penalty payments and partially offsetting the losses caused by the strike.

- Allows suppliers to "catch up" with production and work out the kinks in the supply chain.

I would add that from what I've read the union membership really wants to go on strike to, as an interviewed union worker said, "punish Boeing". They practically booed Blondin (IAM's leader) off the stage after he announced the strike was postponed for two days. Heck, there's even a monument to striking workers outside the union hall. So Boeing says let them have their strike and uses the opportunity to catch up the 787 line.

This obviously, is not a great situation for anybody involved - but it might not be as catastrophic as one might initially think. The Union will have its strike and Boeing will catch up the supply chain. After a month or two there will be an adjustment in the contract offer and then everybody will get back to work.