These are anxious days for Jim Eaton, president of Airdrome Holdings LLC, a supplier of high-pressure tube fittings for Boeing Co. commercial jets.
About 15 percent of the Long Beach-based company's $13 million in annual revenue is derived from Boeing deliveries, and with 18,000 of Boeing's machinists on strike since Sept. 2 he's not sure how long the aircraft maker will ask him to continue supplying his product.
Any halt would be a financial hit, but there's pressure on Eaton not to let Boeing see him sweat.
"I fully expect that if the strike lingers on, we'll have to stop shipping," said Eaton, who employs about 80 workers. "Boeing is a company that pays close attention to our financial strength, so it's a double-edged sword. Something like this could make us look weak in their eyes."
Eaton is not alone in his concerns. He's among 93 mostly small manufacturers in Los Angeles County that supply components to Boeing. All could lose a major source of revenue should production of the 737, 777 and other jets remain on hold.
The last machinists' strike at Boeing in 1995 lasted 69 days, and this one is expected to last at least a month because the company and the International Association of Machinists and Aerospace Workers are so far apart on a new three-year contract, according to industry analysts.
Workers at Boeing plants in Seattle, Wichita, Kan. and Gresham, Ore. walked off after failing to agree with Boeing on a new three-year contract. The two sides are about $1 billion apart in total wages and pension and health packages.
While commercial jet production at Boeing plants has ceased, the Chicago-based aerospace and defense giant has instructed most of its suppliers to continue production and delivery. Boeing wants to ensure that it has enough inventory to ramp up its own production and catch up with orders when the strike is over.
That can only go on for so long, however. At any time, Boeing could order its suppliers to continue production but stop delivery, which would mean subcontractors would have to lay out money for raw materials and labor but not get paid until deliveries resume.
* The full story is available in the Sept. 19 edition of the Business Journal.
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