Boeing's Union Struggles May Affect Programs and Revenue

(MoneyWatch)  Boeing recently negotiated a contract with their engineers in Washington state. This after coming off a nasty strike with the machinist union this Fall. Now they are trying to negotiate with the local in Wichita where they work on a lot of their military programs. The first offer by the company was rejected out-of-hand. Quality Magazine reports that further issues with working out a deal with the union could cause delays in the program underway there. As BNET wrote earlier, not winning the KC-X tanker contract will lead to layoffs in the Wichita plant. Several of the programs like the new AEW aircraft for Australia have already been delayed which hurts earnings as well.

Boeing is facing a great deal of revenue problems here. Not winning the KC-X contract this year, and possibly not winning it at all, may cause them to wind down the work force at Wichita. Some of the other programs if they continue to be delayed will result in less profit for the company. Failure to get substantial new work for the Wichita facility will only exacerbate these issues. The decision by the whole union to work to rule in support of the Kansas workers may also cause delays to their commercial products as well.