by Ireland Owens
The International Association of Machinists (IAM) union strike against Boeing is expected to result in a $1.05 billion loss for the company and its shareholders, as well as a significant loss for its workers and suppliers, according to an analysis by consulting firm Anderson Economic Group (AEG) released Thursday.
Boeing and company shareholders are set to lose an estimated $1.05 billion, with workers and suppliers losing $351 million from Sept. 13 to Friday due to the IAM union strike, according to AEG’s analysis of the company’s lost wages and shareholder earnings. The firm’s report does not estimate separate damages to consumers or customers for the first two weeks of the strike.
Thousands went on a midnight strike against Boeing on Sept. 13 after IAM leaders rejected a tentative agreement with Boeing. Boeing has been plagued with controversies this year, including problems stemming from various safety issues.
Boeing pled guilty to criminal fraud conspiracy charges in July and reached a plea deal to pay a $243.6 million fine over two fatal 737 MAX plane crashes that occurred in 2018 and 2019. Another harmful blow to the company’s reputation came when the Boeing Starliner faced mechanical problems after being launched into space, resulting in the spacecraft’s astronauts remaining stranded in space.
The U.S. Senate Permanent Subcommittee On Investigations (PSI) launched an inquiry into Boeing in March amid concerns of production shortcuts. Boeing prioritized production speed over quality and failed to properly prepare its workers, according to a memo PSI released Tuesday.
IAM and Boeing plan to meet on Friday for further negotiations, according to The Hill. The aerospace company and IAM continue to disagree on several issues including pensions and pay increases, according to The Hill.
“The second week of the machinists’ union strike against Boeing was more costly for the company and its suppliers, as is typical for major industrial strikes,” AEG’s principal and CEO Patrick Anderson said in the release.
“The company’s large backlog of orders, and the fact that it is losing both current production and future parts and service business, mean that Boeing shareholders are effectively incurring losses every day this strike continues,” Anderson said in the release. “Boeing workers on strike are also losing, and as the strike goes on, more of Boeing’s suppliers will be forced to cut wages and hours.”
AEG estimated several categories of direct losses to calculate the economic impact of the strike, according to their analysis. These categories included AEG calculating losses of the company’s shareholders, workers who have lost earnings in local areas near Boeing plants and lost wages of workers.
AEG, IAM and Boeing did not immediately respond to the Daily Caller News Foundation’s requests for comment.
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Ireland Owens is a reporter at Daily Caller News Foundation.
Photo “Boeing Workers on Strike” by Machinists Union.
