Boeing machinists on strike, production halt

Boeing Co. US’s largest plane maker, halted production after its machinists went on strike early on Friday for the first time in 10 years, voting to reject the company's latest contract offer.

Shares of Boeing, whose fortunes have rebounded from Pentagon procurement scandals and management upheaval, fell 2 percent on the New York Stock Exchange. The stock has been up more than 60 percent since last year.

"In terms of stock price performance, a labor strike doesn't appear to have had any major impact on the company's stock price based on past performance," Fulcrum Global Partners analyst Susan Donofrio said in a note to clients.

Boeing spokesman Chaz Bickers said the company was disappointed with the outcome. "No one ever benefits from a strike," he said, reports Reuters.

The strike, the first against Boeing since engineers walked off the job in 2000, includes workers in Seattle, Portland, Oregon, and Wichita, Kansas, with most located in the Seattle area, Boeing's original home. The company moved to Chicago in 2001. Machinists last went on strike in 1995, when they were out for 69 days.

“This strike did not have to occur,” Blondin, president of Machinists District 751 told workers at the union's headquarters in Seattle. “We made our top issues clear months ago and simply asked Boeing to do the right thing for their workforce.”

The strike was approved late yesterday by 86 percent of its membership, Connie Kelliher, a union spokeswoman, said in an interview from Seattle. Boeing offered a 10 percent increase in pensions, while the union had demanded 33 percent more.

Boeing's shares dropped as much as 32 percent in 2000 when the 19,000 engineers staged one of the largest white-collar walkouts in U.S. history.

“While a strike of a couple of weeks might be doable, some kind of accommodation would have to be reached,” said Richard Aboulafia, an aerospace analyst at Fairfax, Virginia-based Teal Group. “If Boeing does cave and give them something like what they want, it will be a bit of a hollow victory because in the long run it will probably result in increased outsourcing.”

Shares of Boeing fell 75 cents, or 1.1 percent, to $65.24 in German trading of 2,080 shares at 10:05 a.m. in Frankfurt. The stock lost 1.5 percent yesterday, trimming its gain for the year to 27 percent, informs Bloomberg.