Around 27,000 machinists at Boeing moved ahead with the third day of a strike, bringing production at Boeing's Seattle plants to a grinding halt.

The striking workers are protesting Boeing's contract offer, with their core disagreement with the aircraft company hinging around the company's plans to shift more jobs to non-union and foreign companies, according to Reuters.

This is the fourth strike in two decades by Boeing's biggest union, and comes at a bad time for the company, when airlines are reeling from unprecedented oil prices and unfavourable market and economic conditions, and have filled Boeing's order books with demand for its 787 Dreamliner.

More than 27,000 Boeing began the 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. (See: Strike may cost Boeing $100 million a day)

Striking workers at Boeing's Everett, Washington plant, which employs around 13,000 members of the International Association of Machinists and Aerospace Workers (IAM), say that the strike is more about the subcontracting, rather than the money. Workers are worried about their jobs being offloaded to subcontractors, or offshore.

Boeing had 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.

Boeing's 2002 contract with the IAM has language in it that allowed Boeing to use external companies or subcontractors to farm out work typically done by the machinists, most of whom are IAM members. The company used those clauses to its advantage in order to expand its supplier base for its latest, much awaited plane, the 787 Dreamliner.

The 787 Dreamliner is seeing components from suppliers around the world, and is only being assembled in Everett. The IAM says Boeing has rid 16,000 IAM members of jobs since 1990 on account of the progressive increases in outsourcing.

Since parts of the Dreamliner are coming in from across the globe, the impact of the strike at Boeing too would trickle down to supplier companies, who would have to deal with higher inventories at Asian and European suppliers plants where most of the main body of the 787 is being sourced from. Japanese engineering giants Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Fuji Heavy Industries are sure to be impacted, as they have helped develop the new carbon-fibre fuselage and wing structures for the Dreamliner.

Industry sources say that Fuji Heavy Industries could see an impact on its aircraft division in case the strike lasts anywhere over two weeks. Fuji Heavy's main line of business is cars, marketed under the Subaru badge.

Similarly, Finmeccanica aerospace and defence company's Italian company Alenia, who is the largest European player on the 787 team of suppliers, could see some impact as well. The 787's tail and parts of its fuselage come from Alenia.

Reports indicate US company Spirit Aerosystems Holdings Inc, a former division of Boeing that is manufacturing the front fuselage of the Dreamliner, is also one of the most vulnerable.

However, airlines who had ordered the 787 have thus far refrained from commenting on their already delayed deliveries being impacted further. Boeing has so far sold 903 Dreamliners to 54 customers, with options for a further 306 and also 155 'price right' positions.

In all Boeing 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.