Third Bridge's head of global analyst Peter McNally talks to The Big Money Show about how the Boeing factory worker strike is affecting business.
Boeing's tough year was compounded last week when some 33,000 union workers went on strike, a move that is expected to cost the embattled aerospace company big if it continues.
According to an analysis by Anderson Economic Group (AEG), workers and the company's shareholders have lost at least $571 million since Boeing workers represented by the International Association of Machinists and Aerospace Workers (IAM) went on strike last Friday, and the losses are only set to grow as the strike drags on.
Workers picket outside a Boeing facility during a strike on September 16, 2024, in Everett, Washington. (M. Scott Brauer/Bloomberg via Getty Images/Getty Images)
Jason Greer, labor expert and founder of Greer Consulting, told FOX Business the strike will likely continue for another two to four weeks, but there are indications it could extend beyond that.
“The striking workers believe they have no choice but to accede to their demands, given how much Boeing has already lost and how much more the workers will lose if the strike continues,” he said.
Boeing begins layoffs amid union strikes, CEO home purchase dispute: 'Very challenging times'
Greer said the biggest question for Boeing is how long the company can withstand the strike.
“Boeing's decisions to lay off non-union employees and cut executive pay to cut costs are a direct sign that the company is preparing for a possible long-term strike,” he said.
Strike signs are displayed outside a Boeing factory in Renton, Washington, on Sept. 13, 2024. The Boeing Machinists union voted overwhelmingly to reject the aircraft maker's contract proposal and strike. (Stephen Brasher/Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| BA | Boeing | 154.64 | -0.57 |
-0.37% |
In determining its short-term estimates of losses during the strike, AEG President and CEO Patrick Anderson said in an interview with FOX Business that the company is assuming there won't be any significant changes in production and that companies will be able to return to business as usual after the strike.
But the longer the strike continues, the weaker that estimate becomes, he said.
Boeing CFO says business is 'challenged': Read memo to employees
Anderson noted that about four weeks after the United Auto Workers strike against General Motors, Ford and Stellantis began last year, AEG warned that it would likely lose its production facilities if the strikes continued in a militant manner. He said continued tensions over the now-closed Stellantis plant in Belvidere, Illinois, and plans to move some production outside the U.S. have made that warning a reality.
On September 12, 2024, workers walked out of a Boeing manufacturing plant in Renton, Washington ahead of a vote on a union agreement. (M. Scott Brauer/Bloomberg via Getty Images/Getty Images)
If the Boeing strike drags on, it could affect productivity and cause costs to skyrocket for the company.
Click here to get FOX Business on the go
“Boeing effectively has a duopoly with Airbus for much of the commercial aviation industry,” Anderson said. “They're both somewhat insulated, but no one is immune to not being able to produce products on time, not being able to produce products at a quality level, or costs rising. So Boeing is a company on edge, and it's vulnerable.”
“This company is an icon of American manufacturing and has been hit many times and now it's facing this severe blow,” he added.
