The ongoing work stoppage at Boeing is now in its second month and there was a positive sign over the weekend that both sides have reportedly agreed to resume talks with the assistance of a federal mediator.  In a previous post, I noted that that the heart of this labor dispute revolves around both healthcare benefits as well as Boeing’s ability to outsource work to some of its outside contractors.  Production operations have ceased since the strike began, impacting all future deliveries of Boeing aircraft including the already delayed 787 Dreamliner program. Boeing senior management has acknowledged that the shipping schedule for the 787 is sure to slip even further.

Last week, Boeing CEO Jim McNerney sent an email to all of his employees offering a bleak vision of what could happen if Boeing management caved in to the demands of striking workers.  The backdrop of the current economic crisis in the U.S. and global financial markets further indicate that this strike could exact a far higher toll to Boeing, its suppliers, as well as to the U.S. economy. Investors put Boeing and other stock associated offerings into a tailspin amid all of these concerns.

My view is that the current economic environment demands that both parties to this dispute obtain a heightened sense of urgency.  If Boeing management had concerns for insuring its ability to outsource certain production, that concern should also now include the ability of certain key suppliers to maintain financial viability if this work stoppage continues to drag-on.  If Boeing’s union negotiators are truly concerned for the long-term viability of member jobs, than the current prospects of uncertain financial markets and increasing unemployment should surely provide a strong motivation to come back to table with a constructive set of give and take over needs of its membership

What was once a disruption to the 787 Dreamliner program could well severely impact aerospace focused supply chains, as well as the U.S. economy.

Bob Ferrari