Boeing (BA) Warns on 777X Wing Manufacture
Shares of the Boeing Company (BA) closed down -0.98 or -0.72 percent on Monday to $135.92 per share, after news that the company may not build its new 777X in Washington State. Boeing has been embroiled in talks with Washingtonâ s largest machinist union, which rejected Boeingâ s latest contract in November. The International Association of Machinists and Aerospace Workers District Lodge 751 turned down Boeingâ s latest proposal, prompting the company to scout other locations for the manufacture of the wing for its new 777X jetliner.
Boeing received 22 bids for the assembly plant from other competing states.
Chicago, Illinois based Boeing Company is an American multinational aerospace corporation involved in the design and manufacture of fixed wing aircraft, rockets, satellites and rotorcraft. The companyâ s main components include Boeing Military Aircraft, Commercial Airplanes, Network & Space Systems and Global Services & Support. Boeing is one of the largest aircraft manufacturers in the world and the second largest aerospace and defense contractor. The company had operating income of $6.1 billion on revenues of $81.7 billion in 2012. The machinists union came under considerable political pressure on Monday from the mayors of Everett, Kent and Renton, along with other local political leaders to approve Boeingâ s latest contract offer. The three towns all have Boeing plants, with the current production of 777 models located in Everett, Washington. Boeing, which has already received orders for its new planes, will begin manufacturing its 777X models in 2017. The new model features wings which retract on the ground and extend in flight making them more efficient. The company currently employs more than 84,000 workers in Washington. The dispute with the union stems from Boeing wanting to phase out their defined benefit pension plan for the Everett plantâ s 31,000 workers, with a defined contribution plan, or 401K plan. The union emphatically rejected the offer. The most recent offer, which according to the president of the machinist union, Tom Buffenbarger, is $1 billion better than the deal offered in November. Buffenbarger said that, â
Published on Dec 31, 2013
By Jay Hawk