In a new wave of cost-cutting measures, Boeing (BA) has initiated hiring freezes and is considering furloughs after 33,000 factory workers went on strike last week. Union workers voted and rejected the aircraft manufacturer’s latest labor contract.
Morningstar equity analyst Nicolas Owens calls this a “prudent step” by Boeing to shore up costs as it tries to get its aircraft production back on track. He suggests that the strike could even aid Boeing in finding profitability, as it is “currently losing money on making airplanes.”
“And so that that… resolving it before then would be beneficial because there’s going to be work lost sort of towards the end of the year anyway,” Owens tells Josh Lipton and Alexandra Canal on Market Domination. “But, I mean, the irony is they’re not paying the machinists while they’re on strike, but it’s the disruption of everything else and loss of productivity on those assembly lines that’s going to cost them.”
Gabelli Funds portfolio manager Tony Bancroft told Yahoo Finance last week that this strike could cost Boeing as much as $100 million per day.
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