Boeing Blames Strike

Boeing (BA) reported earnings and of course blamed the machinist strike for a drop in revenues and of course profitability. This was expected. Boeing needs to wrestle down the high labour costs in the Portland, Seattle and Wichita Plants. The short term pain should be treated as an investment for improved economics in the future. Do not settle until the numbers are good.

However they also keep mentioned supplier problems. Read this quote

“For the first nine months, BCA revenues decreased 3 percent to $23.7 billion on
lower deliveries due to the strike and galley shortage.”

And this quote right in the first paragraph of the earnings release:

“and supplier production challenges on customer-furnished galleys for certain wide-body airplanes.”

The third party supplier challenges continue to be vexatious. When will Boeing have the supply chain figured out? They cannot drive on square wheels forever. Part of the machinist strike is about management’s ability to contract out work that was previously done in house. Financially sound, but Boeing may need to step up some operational practices to ensure smooth production in the future.