Boeing strike costliest in economic damage so far in 2024
Expert says even if the union's strike against Boeing ends next week, there could be long-term impacts beyond the billions it has already cost
Boeing strike is a big blow, but it has bigger challenges to face: Peter McNally
Third Bridge global head of analysts Peter McNally discusses how the Boeing factory workers strike is impacting business on The Big Money Show.
The ongoing strike by Boeing's union machinists could end this week, but not before racking up more economic damage than any other work stoppage in the U.S. so far this year, according to estimates.
Boeing and the union, the International Association of Machinists and Aerospace Workers Local 751, reached a tentative agreement Saturday. The striking workers will vote Wednesday on whether to take the latest offer, which includes a 35% pay hike over four years, a new incentive plan and a $7,000 ratification bonus.
A logo is seen on the Boeing stand on the opening day of the Farnborough International Airshow 2024, southwest of London, on July 22, 2024. The strike by Boeing's union machinists is already the costliest of 2024 in the U.S, according to a new estima (JUSTIN TALLIS/AFP via Getty Images / Getty Images)
But even if the workers agree to accept the deal – which is not guaranteed – the impact could extend far beyond its current price tag, according to Anderson Economic Group (AEG) principal and CEO Patrick Anderson.
"If they ratify the contract and get back to work by Friday, the IAM strike against Boeing would be the costliest strike yet in the contentious year of 2024," Anderson said.
AEG, which specializes in economic impact estimates, figured the cost of the Boeing strike at $7.6 billion through last Friday, and Anderson said adding another week to that total will push the cost well above $8 billion.
United Parcel Services (UPS) workers walk a 'practice picket line' on July 7, 2023, in the Queens borough of New York City, ahead of a possible UPS strike. The Teamsters Union represents more than 300,000 UPS drivers and and warehouse workers, and wo ((Photo by TIMOTHY A. CLARY/AFP via Getty Images) / Getty Images)
The Teamsters' threat to strike against UPS would have been a greater strike in terms of workers walking off the job, Anderson noted, but that strike was averted after a deal was reached.
The union dockworkers' strike launched at the beginning of October that lasted three days "were barely palpable outside port cities," Anderson said, adding that "By our estimate, a one or two-week port strike would have had a smaller impact than the IAM strike against Boeing already has."
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Anderson noted that the Boeing strike's impact has extended over the weeks to beyond the company's picketing workers, to hit its managers and engineers, suppliers and other business in the Seattle area.
Union members react as Aerospace Machinists District 751 President Jon Holden (out of frame) announces that union members rejected a proposed Boeing contract and will go on strike, following voting results at their union hall in Seattle, Washington, (Jason Redmond / AFP via Getty Images / Getty Images)
Since the strike began in mid-September, Boeing imposed furloughs before announcing earlier this month it would lay off 10% of its workforce, impacting some 17,000 people, and cut production in reaction to the strike, which involves 33,000 employees.
"The Boeing strike has not only been costly; it has affected the standing of one of the largest exporters in the US economy, and an icon of American manufacturing prowess," Anderson said.
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He added, "It has already forced the company to push back promised shipments of airframes, and could have long-term effects that are even more costly than the $8 billion that would already been lost by its workers, shareholders and suppliers even if the strike ends next week. "
Reuters contributed to this report.