Striking machinists will soon be back to work at Boeing (BA). About 33,000 members of the International Association of Machinists and Aerospace Workers could return to work on Wednesday after 59% of those voting approved a new contract that will raise wages 38% over the next four years (just over 43% with compounding). Bloomberg Intelligence senior analyst George Ferguson says that the deal will cost Boeing about $1 billion annually, not including gains from a previously announced 10% workforce reduction. With many manufacturers looking to reduce labor costs through automation, Ferguson notes that “it’s really hard to automate” many of the processes on Boeing’s factory floors. “Unlike an auto plant that will build like 440,000 units a year. Even at a 50 rate on the 737, they’re building 600 airplanes a year. The payback from automation takes a lot longer, and the structures are a lot more complex and custom. So, does it mean they can’t do anything? No. They’re constantly making strides in that automation. But it’s much more difficult in this industry because of the volumes and because of the sizes, shapes of some of this stuff,” he tells Yahoo Finance.
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