The Boeing Company, which was struck seven weeks ago by the union representing its machinists, said Wednesday that its third-quarter net income dropped 38 percent because of the strike and other production issues.þþTalks with the International Association of Machinists and Aerospace Workers are scheduled to resume Thursday in an effort to resolve the walkout, which began Sept. 6. þþBoeing’s chief executive, W. James McNerney Jr., speaking to analysts Wednesday after Boeing’s first quarterly results since the strike, said he was optimistic a deal could be reached soon, based on informal conversations with union leaders. But he said an unresolved major issue was the subject of “management rights.” þþMr. McNerney emphasized that Boeing, which increasingly has sent work on its planes to outside contractors, needed to keep its flexibility, particularly in light of the global financial crisis.þþ“The turmoil in the financial markets provides a timely reminder of why it would be unwise for us to agree to terms in any contract that would restrict our ability to manage our business and respond quickly to market dynamics and global customer needs,” Mr. McNerney said. “Jobs in today’s global economy are created and sustained only through productivity improvements and customer-focused innovation.”þþReflecting that turmoil, Boeing said it might have to finance the delivery of some airplanes in 2009 because of tight credit markets. It has not financed planes since 2006. It said it had made commitments to provide backup financing for 3 percent of its airplane deliveries through the end of the next decade. þþFor the third quarter, Boeing said its net income fell to $695 million, or 96 cents a share, compared with $1.1 billion, or $1.44 a share, in the period a year earlier. þþAnalysts had expected Boeing to post better results. Its shares were down 5.6 percent.þþRevenue fell 7 percent, to $15.2 billion. Boeing also said it had negative operating cash flow of $442 million during the quarter, reflecting the effect that the strike has had on aircraft deliveries. In the quarter last year, its operating cash flow was $3.3 billion. Boeing said the strike had reduced its airplane deliveries by 35 jets but said it had a record backlog of $349 billion in jet orders.þþAside from the strike, the company said its earnings also dropped because of a delay in production of some of its largest planes. It said work on them was held up by a shortage of galleys, the area in the plane where flight attendants prepare beverages and meals. þþBoeing halted all its airplane production after the strike by the machinists union, which represents 27,000 workers in Washington State, Oregon and Kansas.þþIn a bulletin to union members Wednesday, Tom Wroblewski, the president of Machinists Union District 751, said it would have been a better business decision for Boeing to reach a deal with the union. þþÿCustomers want their planes, shareholders want their value, and our members want to get back to building the best airplanes in the world,ÿ Mr. Wroblewski said.þþLabor experts say the strike is a key moment for the union, whose members at Boeing fell as low as about 19,000 when orders for aircraft plummeted after the September 2001 attacks. The union is trying to gain jobs as Boeing is sending more work outside the United States, especially on its new 787 jet, the Dreamliner. þþDevelopment of the plane, already more than a year late, has continued despite the strike. But Boeing has said the walkout could push back the first test flight of the Dreamliner, which was scheduled to take place this quarter. þþMr. McNerney did not give a specific update. But he said work on all Boeing aircraft, including the Dreamliner, would be delayed on a “day for day” basis because of the strike, which has lasted 47 days so far. Given that, it appears likely that the first test flight will be pushed back to next year.þþBut Mr. McNerney said he had not soured on the company’s union-represented work force.þþ“Notwithstanding the strike, and not withstanding the frustration on behalf of our customers, the workers in Puget Sound represented by the I.A.M. are very fine workers,” Mr. McNerney said. “I’m anxious to get them back to work. They can compete for any work that we’ve got.”þþ
Source: NY Times
