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Quick Hits: Worker Strike Could Ground Boeing


Brief scrutiny of today's headlines.

Boeing (BA) and the International Association of Machinists and Aerospace Workers vowed to stick to their positions as each prepared for a vote Wednesday that could shut down production.

The union, which represents about 26,800 workers, struck 3 years ago during the last round of negotiations. A strike would cost Boeing about $100 million a day in lost revenue, the Wall Street Journal reports.

A strike would further delay delivery of Boeing's 787 Dreamliner, already 2 years behind schedule.

When the union struck for 28 days in 2005, several Boeing suppliers temporarily laid off workers because parts were stacking up.

Boeing officials say they'll stand behind what they call their best and final contract offer. Unless at least two-thirds of the machinists vote to reject the contract and vote to strike, the contract becomes effective by default.

Boeing has offered to pay each union a member a $2,500 signing bonus if the contract is ratified on or before Wednesday.

The proposed deal would boost wages an average of 11%, or $34,000 for each worker over the 3-year life of the contract. In addition, it would boost the pension multiplier by 14% to $80 a month for each year of service. Under the proposed deal, the average union member would earn about $65,000 a year before overtime that typically amounts to $10,000 or more a year.

The union seeks pay raises of at least 13% and a fatter pension contribution. It also wants Boeing to set aside plans to have workers pay a larger share of some healthcare costs.

Perhaps the union should do the math: Did workers ever recover lost wages from the 28-day strike 3 years ago? Does the union care about the potential layoffs at suppliers if the strike drags on?

Boeing's competitors include Lockheed Martin (LMT), Northrop Grumman (NOC) and Airbus.
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