Boeing Co. reported a fall in the percentage of its earnings in the third quarter following supply problems for the 787 Dreamliner and also due to its commercial aircraft facilities plagued with machinist strikes.
Compared to last year’s figures of $1.11 billion earnings this quarter, this year the Boeing Co. earnings are only around $695 million. The company also saw a 7% fall in sales. The current economic situation and the machinist strike at the company’s commercial facility contributed to the fall in share prices by almost 26%. According to an analyst Joseph Nadol from JP Morgan, Boeing Co. would have anyway missed its target regardless of the strike due to its problems with the suppliers and hitches in the 747-8 development program.
Machinists governed by a Union stopped commercial aircraft work for almost 25 days of the last quarter starting from September 6th. Strike was initiated following their disagreement with the management on issues related to pensions, job security, health care and wages. The next meeting between the workers and management is scheduled for Thursday in Washington D.C.
The management of Boeing Co. was working towards arriving at a settlement with the union leaders with the help of a federal mediator said Jim McNerney, the Chief Executive to the analysts over a conference call. Boeing also said once the machinist strike ends, it will forecast and update its schedule of aircraft delivery.
McNerney also went on to say that though Boeing Co.’s customers were affected by the current credit crisis, the company as such was insulated till 2009 due to its manufacturing backlog.
