Boeing’s Bad Week Gets Worse

BoeingShares of Boeing (NYSE:BA) are off just 2.3 percent since the beginning of 2013, which is pretty good, all things considered. The world’s leading aerospace company is in the throes of a public-relations nightmare as aviation officials around the world ground its flagship aircraft, the 787 Dreamliner, because of an issue with the lithium-ion batteries used in the plane’s advanced electronics system.

Investors have been taken on a roller coaster ride the past few weeks as expected growing pains for the aircraft turned into a full-blown review by the Federal Aviation Administration. While the lithium-ion battery, which is manufactured by GS Yuasa Corp., has been at the heart of safety concerns, a fuel leak is also under investigation.

But Boeing has more than just the Dreamliner to worry about. Contract negotiations between management and a labor union representing 23,000 engineers and technical workers appear to be falling apart, threatening the plane’s production, which has so far continued without fault…

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Boeing Annual Meeting“In a move that escalates its mounting problems, The Boeing Company today (Jan. 17) rejected union offers to extend existing contracts and instead gave its ‘last best and final’ offers to the Society of Professional Engineering Employees in Aerospace,” reported the union.

Contract negotiations have been going on for nearly a year, and though federal mediators were brought in, apparently little to no progress has been made. The union, highly frustrated with Boeing’s treatment, is pinning the issues with the 787 on Boeing corporate.

“Boeing corporate created the 787 problems by ignoring the warnings of the Boeing technical community,” said Joel Funfar, a technical negotiation team member at SPEEA. “Now, they propose to double down on their failed outsourcing strategy by outsourcing the engineering work required to solve the problems caused by previous rounds of outsourcing.”

“Boeing’s actions reiterate the company’s growing disrespect for the engineers and technical workers who are essential to working issues and restoring confidence in the 787,” said the union in a statement. “SPEEA members will vote on the company’s offers in the coming weeks. Ballots are likely to include a request to grant the Professional and Technical Negotiation Teams authority to call a strike.”

At the end of its January 17 statement, SPEEA reminded readers that in 2000, a 40-day strike “stopped deliveries and caused major factory and service bottlenecks at Boeing plants around the country.” Union members have been preparing for the possibility of a strike, but it still remains an option of absolute last resort.

Boeing Company (The) Common Sto Stock Chart - BA Interactive Chart - Yahoo! Finance

Don’t Miss: Here’s How GE Is Winning.