If the Boeing strike drags on for more than three months, there could be long-lasting harm to the country's exports, economists said.
By dollar value, Boeing Co ranks among United States' top industrial exporters. Exports are one of the few bright spots in the US economy. But that could change if the walkout runs beyond three months and customers are spooked, eventually turning to Chicago-based Boeing's European rival, Airbus SAS, for future orders of commercial passenger and cargo jets.
Few expect the strike to last that long. Besides, analyst Cai von Rumohr at Cowen & Co noted on Monday that Airbus has a four to seven-year backlog and thus is in no position to take any of Boeing's orders in the near term.
The last two strikes by the International Association of Machinists and Aerospace Workers at Boeing's commercial aircraft operations lasted 24 days in 2005 and 69 days in 1995. The latter was the longest at Boeing since a 140-day strike in 1948.
In general, Boeing receives about 50 percent to 60 percent of the purchase price on delivery, the rest coming earlier in payments negotiated separately with each order, said Richard Aboulafia, vice president and analyst for the Teal Group in Fairfax, Virginia. List prices range from US$50 million to US$57 million for a 737-600 to US$285.5 million to US$300 million fora 747-8.
Boeing failed to deliver more than two dozen planes on schedule during the walkout three years ago. This time, with about a seven-year order backlog and a scheduled delivery rate of more than 40 planes a month, it stands to lose US$100 million to US$110 million a day in deferred revenue, analysts estimated.
"If it's a month long, you'll definitely see a blip" in trade gap figures, Aboulafia said.
As of Monday, Boeing spokesman Tim Healy and Connie Kelliher, a spokeswoman for Machinists District Lodge 751 in Seattle, said both sides were ready to resume negotiations at any time.
Union members voted 80 percent last Wednesday to reject Boeing's last contract offer and 87 percent to go on strike the next day. Both sides agreed to extend the old contract for 48 hours in a last-ditch bargaining effort.
The Boeing walkout began on Saturday morning after that deadline expired without an agreement.
