The strike by members of the International Association of Machinists against Boeing has cost the company nearly $5 billion, according to a new analysis by Anderson Economic Group. The strike began on September 13 and has resulted in a halt in operations at Boeing’s production facility in Everett, Washington. This strike is the first at the company in 16 years, and has led to significant financial losses for both Boeing’s workers and shareholders.
The $5 billion tab underscores the challenges facing Boeing, which has been dealing with a series of setbacks in recent years, including fatal crashes, increased regulatory scrutiny, and now the strike by 33,000 workers. Suppliers, Seattle-area businesses, and Boeing customers are also feeling the financial impact of the strike, with losses totaling $900 million for suppliers, $102 million for non-Boeing Seattle workers, and $285 million for Boeing customers worldwide.
Boeing’s financial struggles have been exacerbated by the COVID-19 pandemic, with the company announcing layoffs of 17,000 employees, or 10% of its workforce. The company is facing cash flow issues and may need to borrow or issue stock to keep operations going through the strike and a potential difficult recovery period. Prior to the strike, Boeing pled guilty to defrauding the FAA in connection with the design flaw in its 737 Max fleet, which resulted in two fatal crashes in 2018 and 2019.
Negotiations between Boeing and the striking IAM workers have hit a roadblock, with talks breaking off after two days of federally mediated negotiating. While the two sides are far apart on many issues, IAM president John Holden remains hopeful that a deal can be reached. He expressed confidence in the strength of the strike fund to support members as long as necessary, but acknowledged the impact the strike will have on the economy, including the GDP and the aerospace supply chain.
Despite the challenges facing Boeing and its workers, both sides are hopeful that a resolution can be reached. Holden emphasized the importance of continued negotiations and reaching a reasonable agreement to end the strike. The longer the strike goes on, the harder it will be for Boeing to restart production and recover from the financial losses. Both Boeing and its workers are facing difficult decisions as they navigate through this challenging time.
