IAM strike forces Boeing to halt production

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Boeing is being forced to halt jetliner production today (Saturday), costing the company up to $100 million per day as 27,000 machinists have voted to strike.

Negotiations between Boeing and the International Association of Machinists and Aerospace Workers Union (IAM) collapsed after a 48-hour contract extension yielded no new breakthrough.

Boeing says that for the, "787 in particular, a protracted strike could risk the ability to fly in the fourth quarter," adding "mitigation plans are in place to minimize impact of work stoppage."

The 787 programme is already fifteen months behind schedule.

All aircraft completed prior to the strike will be delivered on schedule, and Boeing pledges continuing support for all aircraft in service.

Boeing has estimated that it will deliver between 475 and 480 aircraft in 2008, a number that is likely to be impacted with the strike.

For the Next Generation 737, Boeing's highest production rate aircraft, each day that the strike rolls on means one less 737 delivered to airlines, many in desperate need of fuel efficient aircraft to replace aging fleets.

In the first half of 2008 Boeing delivered 187 737s.

For the widebody twin-engine 777 programme, every five days means one less aircraft delivered. During the first half of 2008 Boeing averaged a production rate of just under seven per month to deliver 39 777s to its customers.

Currently, Boeing has eleven 777 aircraft at various states of completion on the flight line at its Everett, Washington facility, including four for Emirates, two for Brazil's TAM, and one each for Cathay Pacific, Qatar Airways, Asiana Airlines and fledgling trans-pacific Australian carrier V Australia, which is set to begin service from Sydney to Los Angeles on 15 December.

In addition, the 777 freighter program is undergoing a certification campaign with two aircraft based at Boeing Field in Seattle. The first 777F is set to be delivered later this year.

For Boeing's lowest rate production aircraft, the widebody 767 and 747 lines, the first half of 2008 saw an output of roughly one per month, delivering six and nine aircraft respectively.

An IAM strike also halts production for the 747-8F, which is scheduled for roll-out in February of next year.

On 3 September, 87% of the IAM membership--Boeing's largest union--voted to strike, with 80% rejecting the company's best and final offer. Later that evening, Boeing and the IAM leadership agreed to a 48-hour extension in the contract to negotiate with the assistance of a federally appointed mediator.

"Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues," said Tom Wroblewski, IAM district president, in an open letter to the union membership.

Boeing also expressed its disappointment in the outcome of the negotiations.

"Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing good-faith explorations of options that could lead to an agreement. Unfortunately the differences were too great to close," said Scott Carson, president and CEO of Boeing Commercial Airplanes who was present at the negotiations.

This will be the first time the IAM has voted in favor of a strike in back-to-back contract negotiations. The union's 2005 strike lasted for 28 days.

As IAM prepares to strike, both sides indicated it was the responsibility of the other to step up and return to the negotiating table.

"We are interested in speaking to the IAM," said a Boeing spokesman. "And when we hear from [the IAM] we'll be able to [continue negotiations]."

"If this Company wants to talk," said Wroblewski. "They have my number, they can reach me on the picket line.