Boeing strike to delay 787 Dreamliner 'at least' another month - 'outsourcing' is major issue
11 Sep 2008
A senior Boeing official has conceded that the ongoing strike by the International Assn. of Machinists and Aerospace Workers means "at least a one-month delay" in the 787 programme. He also said that "there are still significant issues" separating the company and the IAM workers.
Speaking to a Morgan Stanley investors conference, CFO James Bell said Boeing and IAM were currently "sort of in a cooling-off period." The two sides were in intensive talks last week but failed to prevent an industrial action from taking place.
Bell also conceded that a major issue between the two sides was outsourcing of manufacturing work.
Boeing has developed a global supply chain for building the futuristic 787 Dreamliner and the union is concerned that more work will gradually be sourced away from the company's main production plants near Seattle.
According to Bell, the union "would like all of the work to be done in the Puget Sound area and that's not realistic." The company, he explained, would like "complete flexibility" to outsource work to suppliers; "We have to figure out what's the right balance."
He clarified that outsourcing wasn't the only issue separating the two sides and the gap needed to be closed on "several" issues.
Interestingly, Bell also warned that the current strike would have a "more severe impact compared to the last strike" because the company had 50 per cent higher production rates now than in 2005. A four week strike then halted delivery of 21 aircraft.
Bell said work had come to a stop on all aircraft programmes, including the much-delayed 787. "There's not a lot of margin in the 787 program. . .I think we're going to have at least a one-month delay. I don't know if [the strike] will have a multiplier effect." he said.
