Boeing near strike
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Manufacturing News, Source : TheManufacturer.com
Published : 03 Sep 2002 17:18
Although members of the International Association of Machinists and Aerospace Workers’ contract with the Boeing Company expired midnight on Sunday, union leaders urged its 26,000 members to go to work on Tuesday to see if the final offer improves.
The union rejected Boeing’s final negotiating offer last week, which provided for improved pension but not job security, and a final revote for the union is planned for later this week, once federal mediators have met.
Despite obvious negatives for a strike, certain analysts agree that the halt in production could carry over some benefits for Boeing. According to Richard Aboulafia, a Teal Group analyst, the strike could stop the financial hemorrhage associated with financing un-needed planes, since Boeing’s cash flow has been almost cut in half.
Recently, the company’s inventories have ballooned to $1.2 billion in a six-month period, when only last year it was at negative $618 million. Production delays from the strike could alleviate the strain of previous financing commitments worth nearly $4 billion for aircraft currently on order.
Furthermore, Boeing has a small inventory of finished but unsold planes that could be sold off if the strike takes place.
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