23.09.2024. / 8:00
ARLINGTON – The strike at the Boeing company, in which 33,000 members of the International Union of Machinists have been participating since last Friday, according to Anderson Economic Group estimates, cost the company and workers $572 million in the first week.
Losses will increase rapidly if an agreement is not reached, possibly already in the second week of the strike, said the aforementioned research firm from Michigan, which has experience in estimating the costs of economic disruptions such as strikes. The losses for Boeing in the first week are significant, but they will be insignificant compared to what follows in the following weeks, reports CNN.
Still, these losses are less than the $1.6 billion Anderson estimated last year’s strike by automakers General Motors, Ford and Stellantis cost the economy in its first week. On the other hand, the strike at Boeing has not yet had a measurable economic impact on the airlines. According to Anderson’s estimates, the strike will cause local losses of around ten million dollars, including businesses near the factories.
Boeing deliveries to many airlines have already been delayed, following an incident with a door falling off a Boeing 737 Max plane in January, which led to increased scrutiny from the Federal Aviation Administration (FAA).
The biggest losses so far come from the almost complete stoppage of commercial aircraft production. Anderson estimates that Boeing lost $445 million in the first week of the strike, because it was unable to finish and deliver the planes to customers. Boeing receives most of the money from the sale of airplanes only after delivery.
Losses for workers, mostly the 33,000 union members who went on strike, as well as for suppliers, amount to about $117 million in the first week. The maximum hourly wage for union members at the company is $51.30 an hour, or $2,052 for a 40-hour week, plus bonuses and overtime.
The union announced last Sunday that the two sides are still far from an agreement, and given that Boeing is soon planning to gradually lay off many non-union workers, losses could reach $1 billion as early as next week. Boeing has one non-union plant, located in South Carolina, where the 787 Dreamliner continues to be produced.
Regardless of how long the strike lasts, Boeing has a long way to go to return to profitability. The company is limited in production of the 737 Max plane while the FAA oversees efforts to improve the quality of the production line.
Boeing did not make a profit last year. In fact, the company has lost money every year since 2018, when a series of fatal accidents and near-catastrophic incidents damaged its reputation and finances. If Boeing were any other company, it probably would have declared bankruptcy, but as part of a too-big-to-fail global monopoly, that didn’t happen.
However, in 2023, the CEO, who is an accountant by profession, received a 45 percent salary increase, almost $33 million. Meanwhile, pay for Boeing’s 33,000 unionized workers remained unchanged, angering employees. Years of pent-up discontent over mismanagement at Boeing, combined with inflation and a post-pandemic strengthening of the labor movement, made this strike inevitable. Biznis.rs
Source: www.capital.ba
