Boeing’s (BA) machinists have decided to strike the company over wage and benefit issues. The union will hold off walking out for two days to see if a last moment deal can be reached.

A compromise seems unlikely. Boeing says it has given the workers its last offer and that the offer is unusually generous.

The aircraft firm’s executives have not been terribly adroit at making a case that they cannot give the unions more. Boeing’s recent news releases are filled with announcements of sales of its new Dreamliner, and its older but popular 777. Boeing has also been bullish on its prospects over the next two decades, in part due to expected sales in China.

The reasoning behind Boeing’s statement that it has given the union all it can is that higher labor costs could hurt future earnings. That would be especially true if the company hit a sales downturn. By Boeing’s own admission, it has a multi-year backlog of aircraft orders, so the argument is a bit thin.

Boeing’s airline customers are already upset by delays in the Dreamliner’s launch. Some have even asked for compensation because their plans to put the more fuel-efficient plane into service have been postponed.

Boeing’s shares are at $66, down from a 52-week high of $107. Investors can see that a strike would damage earnings and give rival Airbus a chance to take some Boeing business.

Boeing’s management has not done anyone a favor by holding out.

Douglas A. McIntyre

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