Boeing Busts the Union

[Omaha Steve]

http://www.fool.com/investing/general/2009/01/30/boeing-busts-the-union.aspx

By Rich Smith
January 30, 2009 | Comments (3)

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I started out this column with the best of intentions. All I wanted to do was pen a few words on the subject of Boeing's (NYSE: BA) year-end earnings release. Just the facts, ma'am.

And all for naught.

Intellectually, I know this was Boeing's plan. When a company is forced to admit that despite doing $12.7 billion in business, it couldn't earn even a penny's worth of profit -- to the contrary, that it lost $0.08 per share -- any PR spokesman worth his salary is obviously going to try to change the story. Divert attention from the loss, make something else the headline.

Mission accomplished
Much as I'd like to dwell on Boeing's failure to earn its shareholders (including yours Fool-y) any profit this quarter, the sad fact is that "they got me." The bigger story here is not one quarter's loss (however massive). But rather the news of how Boeing's union laid it low.

In months past, I wrote several times on the Great Boeing Machinists Strike of 2008. How it first endangered, then torpedoed the businesses of Boeing parts suppliers like General Electric (NYSE: GE), Honeywell (NYSE: HON), and United Tech (NYSE: UTX). How it would delay the arrival of Boeing's ballyhooed 787 "Logistical Nightmare Liner," with particularly dire results for key suppliers to that plane, such as Spirit AeroSystems (NYSE: SPR) and Goodrich (NYSE: GR).

And of course, I discussed the strike itself, in which Boeing's machinists union angled for guarantees of job security against Boeing's warnings that guarantees would hobble its ability to react to changing markets (like, for instance, a global recession) and hurt profits. When all was said and done, the union won job guarantees concessions -- but now we see the cost.

FULL story at link.