The ongoing strike at Boeing, now in its seventh day, has already cost the company and its workers an estimated $572 million, according to a report by Anderson Economic Group.
The strike involves 33,000 members of the International Association of Machinists union, and the financial impact is expected to grow significantly if an agreement isn’t reached soon.
Patrick Anderson, president of the Michigan-based research firm, warned that losses could accelerate in the second week of the strike.
“The first week of losses for Boeing are substantial, but they’ll pale in comparison to what comes in the following weeks,” he said.
The strike has halted much of Boeing’s commercial aircraft production, with the company losing around $445 million in the first week alone due to its inability to complete and deliver planes.
Boeing typically receives the majority of its payments when aircraft are delivered to customers. Workers and suppliers have also been affected, with their combined losses estimated at $117 million.
The top union pay rate for Boeing workers is about $51.30 per hour, which translates to $2,052 for a 40-hour week, not including additional pay premiums and overtime.
Boeing CEO Kelly Ortberg announced that the company will begin furloughing non-union employees, who will be off work without pay for one week out of every four during the strike.
Boeing also implemented a hiring freeze and paused new orders from suppliers to manage costs.
Although Boeing has one non-union plant in South Carolina, which continues to produce the 787 Dreamliner, the strike has impacted the production of its best-selling 737 Max jets and other models, like the 777F and 767F, which are built at unionized factories now shut down by the strike.
Local businesses near Boeing’s plants are also feeling the effects, with an estimated $10 million in losses, according to Anderson.
While the strike has yet to impact airlines significantly, Boeing has already faced delays in deliveries due to earlier safety issues and increased oversight from the Federal Aviation Administration (FAA).
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