More than 27,000 Boeing workers have begun a strike action that is likely to cost the US aerospace giant $100 million a day in lost revenue. Boeing's production lines for its 737, 747 and 777 family of aircraft have come to a halt even it, one of the world's biggest manufacturer of commercial aircraft, struggles to meet a record backlog of orders worth $275 billion.

Critically, the strike action is now expected to further delay the much anticipated 787 Dreamliner, already running more than a year behind schedule and due to make its first flight later this year. The delay is likely to turn existing and potential customers away from the much talked about aircraft, apart from increasing the size of compensation that Boeing will have to pay frustrated customers.

Singapore Airlines, which has 20 of these futuristic aircraft on order for delivery starting in 2011, said it was in talks with the company over the impact of the strike action on deliveries.

Boeing and  International Association of Machinists and Aerospace Workers (IAM) negotiators, along with federal mediators, met in Florida in a last-ditch effort to end disagreements over wage increases, healthcare contributions and the company's outsourcing policy. The 48-hour extension of talks failed to avert the strike action as workers voted to reject Boeing's best and final offer.

Boeing proposed an 11 per cent wage increase over the three-year life of the contract, a one-time lump sum and other incentives. This did not meet union expectations of a 13 per cent wage increase, no change to healthcare contributions and the rollback of provisions allowing Boeing to outsource work.

Scott Carson, Boeing's head of commercial aircraft, said: ''Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing options that could lead to an agreement. Unfortunately, the differences were too great to close.''

No further talks are scheduled.

Boeing said it would keep its plants open as other union workers and non-union employees are expected to report for work.

Boeing is expected to deliver aircraft that have come off production lines but not do any more assembly work.

Yet another delay
A Boeing spokesman admitted that a prolonged strike could result in another delay of a test flight of the 787 Dreamliner, its first, scheduled for the fourth quarter.

Boeing has so far sold 903 787s to 54 customers, with options for a further 306 and also 155 'price right' positions. In all it has committed to build 1,209 Dreamliners, ignoring the 'price rights', which do not guarantee a production slot.

Given its last juggling of production schedules, in April this year, it was anticipated that Boeing would deliver 25 Dreamliners in 2009, 69 in 2010,103 in 2011 and 120 in 2012. This schedule involved average delays on Dreamliner deliveries of 30 months for Air Canada and 27 months for ILFCA, which is the largest 787 customer with 74 orders.

There was a silver lining in the darkening clouds for Boeing, however, with Gulf Air exercisng eight 787 options. This has taken the number of firm orders for the aircraft past the 900 mark. Gulf now has 24 787s on order.

First flight
Meanwhile, completion of 'Ship One' is likely to slip at least eight weeks to mid-October, according to industry sources, with latest estimates putting first flight at "earliest late December and more likely January 2009."