Jan. 3 - Here's what Boeing's stakeholders stand to lose if the machinists vote against its latest contract offer. Fred Katayama reports.
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Boeing machinists could be in for a hard landing if they again reject the company's latest labor contract offer. Thousands of jobs at stake in their face-off with their employer. Boeing threatens to make the wings and possibly the whole body of its next big jet - the 777X - in another state if it doesn't get its way.
Local union leaders are recommending that workers vote no. Should the naysayers win, here's the cost to various stakeholders.
Washington state could take a big hit, That's where the Chicago-based company builds its commercial planes. Industry advocates estimate Boeing injects $70 billion into the state's economy. The 777 widebody itself generates nearly 57,000 local jobs.
The company loses the chance to gain labor peace for another 10 years after suffering five strikes in two decades, Plus, brokerage firm Canaccord Genuity estimates it'll miss out on $2 a share in additional annual earnings they'd get from scrapping pensions as proposed in the latest contract. But there's a silver lining: moving to another state could cut labor costs and boost earnings over the long run.
Machinists stand to lose roughly 20,000 well-paid jobs in Washington if Boeing sends the work elsewhere. Twenty two states have put in bids laden with incentives. Given the ecosystem of suppliers, Wall Street believes Boeing is better off staying in Seattle. Analysts say the frontrunner among the bidders is South Carolina, where Boeing makes fuselage sections for the 787 Dreamliners at its non-union plant.
Stifel analyst Steve Levenson said, "If the proposal is not approved, we would expect work to go to another location, potentially including right-to-work states."
Investors haven't taken flight. The stock rose slightly, adding to its 81 percent rise last year.
The vote's tally is expected around midnight Eastern time.
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