Commentary
Boeing is currently facing challenges.
One of the major issues it is dealing with is a strike by its union, which, despite the company’s financial difficulties, went on strike for 53 days. This strike caused disruptions to production lines in Oregon and Washington, and Boeing claims that the union did not negotiate in good faith, resulting in a cost of $9.7 billion for the company and its suppliers. Given Boeing’s importance to U.S. national security, taxpayers may end up bearing the financial burden. It is crucial to find ways to reduce this cost, especially considering the significant national debt.
The strike concluded on Nov. 4 with the union imposing additional costs in the new contract, when ideally, the union and its members should have taken responsibility for the damage caused. The deal, negotiated by the Biden administration, included a 38 percent wage increase and a $12,000 ratification bonus for each worker, which surpasses U.S. market rates and what China pays its aircraft workers. This disparity could potentially impact Boeing’s competitiveness in global markets, especially against China’s growing aerospace industry.
Boeing’s escalating debt, which has surpassed $57 billion since 2018, coupled with the challenges posed by the strike, has forced the company to implement significant cost-cutting measures, including laying off thousands of workers and potentially delaying research and development projects. Meanwhile, Chinese aerospace companies benefit from government subsidies and market protection, giving them a competitive edge over Boeing.
Boeing’s role extends beyond civilian aircraft production, as it is a key aerospace-defense contractor crucial for U.S. national security. The strike not only affected Boeing’s shareholders but also posed a threat to national security and added to the burden on taxpayers. It is essential to safeguard Boeing’s stability to ensure continued support for critical defense needs.
To address these challenges, policies could be implemented to enhance Boeing’s competitiveness and reduce costs. Strengthening management’s position in negotiations with the union, promoting technology exchange between Boeing and Airbus, and facilitating military and civilian aircraft exports through government support are among the suggested strategies. Collaboration with allies to support defense contractors and maintain a robust U.S. defense sector is vital for national security and global stability.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
