The Motley Fool Previous Page


Boeing Negotiations Heat Up, and 1 Reason Behind Ford's Success

http://www.fool.com/investing/general/2013/11/12/boeing-negotiations-heat-up-and-1-reason-behind-fo.aspx

Daniel Miller
November 12, 2013

The Conference Board today reported an improved global economic outlook for next year, with worldwide growth pace predicted to improve from 2.8% to 3.1%. The U.S. will do its part with a growth rate expected to improve from 1.6% to 2.3% next year. Despite the overall growth, China's rate is expected to slow to 7% for 2013, which is the weakest rate the country has seen in more than a decade.

In other news, as uncertainty remains regarding the Federal Reserve's potential decision to draw down its bond-purchasing program, expect market volatility going forward. In today's trading, U.S. markets are flat, with the Dow Jones Industrial Average (DJINDICES: ^DJI) down a modest 22 points just after 3 p.m. EST. Here are some of the movers. 

Inside the Dow, Boeing (NYSE: BA) has been one of the best performers over the last year but is trading flat today as relations between the aircraft manufacturer and its machinists union heat up. Just hours after Washington Governor Jay Inslee signed a law that provides almost $9 billion in tax incentives to keep production of Boeing's 777X in the state, union members rallied against a proposed labor contract from Boeing.

Union members vowed to vote against the offer Wednesday, but doing so risks losing years of work and thousands of jobs. While it would likely benefit both sides to come to terms, Boeing has a plant in South Carolina that is strongly considered a second option.

"We've made it very clear to Boeing that we're very interested," South Carolina state Representative Bobby Harrell said, according to Reuters. "I expect we'll be negotiating with them in the very near future."

So far investors have shrugged off the lack of progress in the labor negotiations, but it's something investors must keep an eye on, as the two sides have had a rocky history, and this latest standoff could lead to a strike. That's the last thing Boeing needs after its 787 Dreamliner was slow to production and had many cost overruns.

Outside the Dow Jones, Ford (NYSE: F) has also been having a strong year and recently reported third-quarter results that beat Wall Street expectations. One reason for Ford