The news this weekend indicating the failure to reach any form of bargaining agreement and subsequent strike condition among the International Association of Machinists and Aerospace Workers (IAM) and Boeing will certainly add yet another disruption to Boeing’s supply chain, as well as its 787 Dreamliner delivery schedule. While Boeing has indicated that it would keep its production facilities open, production lines in Everett and Renton Washington have terminated operations. The often delayed 787 program which is already 15 months late from original promised delivery to initial customers must now overcome yet another disruption is that schedule. Supply Chain Matters has penned previous posts citing the ongoing challenges and consequent disruptions to this program.
It has been reported that major sticking points in the negotiations were both healthcare benefits as well as outsourcing. The IAM is working to bring back outsourced jobs, and Boeing’s senior management rightfully believes that the ability to leverage a global supply chain outsourcing program is the future for Boeing. Specific efforts with the 787 program were focused on driving not only industry leading product innovation, but process and supply chain innovation as well. This latest incident obviously adds collaboration with its workforce on supporting such innovation as yet one more significant challenge.
If past strikes among Boeing and the IAM are any bellwether, than we can expect to see a lack of any progress for weeks, at least until health and strike benefits begin to deplete among striking workers. With over $275B in airplane orders on backlog for Boeing, the IAM obviously feels that it has the leverage in ultimate negotiations. Time and who will blink first will no doubt provide the ultimate resolution to this stoppage. In the meantime, Boeing’s airline customers and suppliers must once again work around a supply chain wide disruption.