By Chang-Ran Kim and Tim Hepher
TOKYO/PARIS (Reuters) - Aerospace groups dusted offcontingency plans on Monday for a potentially lengthy strike atBOEING (BA.NY) whose workers halted production for a third day, whileshares in the parent of European rival Airbus got a sharpboost.
Boeing's assembly lines in the Seattle area fell silent onSaturday after emergency talks between the world'sbiggest-selling planemaker and its 27,000-strong machinists'union failed to agree a new contract.
Each day of the strike will cost Boeing $100 million (57million pounds) in sales and 1 cent per share in profit,according to analysts, who say the company will try to dampenthe ripple effect on global suppliers by slowing rather thanhalting a vast industrial supply chain.
Boeing is cushioned for the time being by a $4.1 billionprofit last year and a record $275 billion worth of commercialplane orders in its books. But the strike could create problemsmuch sooner for an increasingly global list of suppliers.
"My big worry is that historically Boeing strikes tend tobe protracted," said Howard Wheeldon, senior strategist at BGCBrokers LP in London.
"It is serious. This isn't just a dispute between theworkforce and Boeing, but between the workforce and its ownunion. I am concerned it will get worse before it gets better."
Any prolonged strike will have an impact first on companieswhich produce parts and engines for existing models such as thepopular single-aisle 737 or the wide-body 777 mini-jumbo, butit could eventually push back the already delayed 787Dreamliner.
A spokesman at Japanese supplier Fuji Heavy Industries,whose main business is making cars under the Subaru brand, saida lengthy strike could have an impact on its aircraft division.
"We do good business, especially for the 777. Right nowwe're waiting for information from Boeing, but if this lastsone, two weeks, it would have some impact," he said.
In Europe, shares in the aerospace sector were mostlypulled higher by a strong equity market following a mortgagebail-out in the United States that eased jitters over thecredit crisis.
The strike is good news for European aerospace group EADS,owner of Boeing's arch-rival Airbus, whose shares rose morethan 5 percent and outperformed the rest of the market.
However shares in France's Latecoere, which makes aircraftdoors and other structural components for both planemakers,fell around 2 percent. Italy's Finmeccanica SpA, whose Aleniaunit is a major partner on the 787, failed to keep up with therise in the rest of the market.
"For the time being there is no impact on production orprogrammes, but we'll need to see what happens with Boeing'sprogrammes," a source close to the company said.
JOB FEARS
The walkout by the International Association of Machinistsand Aerospace Workers (IAM), Boeing's largest union, is thefourth in 20 years. The union struck for 48 days in 1989, 69days in 1995 and 28 days in 2005.
Economists have warned a prolonged strike could badly hitthe economy around the Seattle area, where Boeing's commercialassembly plants are located, and dent the overall U.S. economy.
Boeing machinists are protesting not only about itscontract offer but what they see as plans to shift more jobs tonon-union and foreign companies. Some were angered by a uniondecision to allow two days of extra talks after an overwhelmingstrike vote.
"It's not about the money, it's all about thesubcontracting wordage," said picketer Butch Blount, a53-year-old motor equipment operator, handing out cookies tofellow strikers outside Boeing's massive Everett, Washington,plant on Sunday.
Boeing has significantly widened its base of suppliers forits newest plane, the 787 Dreamliner, which is being made bycompanies around the world and only assembled in Everett.
Airlines have been quiet so far on the effects of thestrike. Singapore Airlines, which has 20 of the 787s on orderfor delivery starting in 2011, said it was in talks with Boeingover how the walkout might affect deliveries.
The new freighter version of its popular long-range 777,which has 75 orders and is set for first delivery in the fourthquarter, also faces delays, along with early production work onBoeing's new jumbo, the 747-8.
(Additional reporting by Paolo Biondi, Bill Rigby and LauraMyers; Editing by David Holmes)
