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Analyst: Boeing Machinist Strike Unlikely

Jefferies & Co. analyst Howard A. Rubel said he did not expect Boeing's talks with the union to result in a strike, adding 'neither side wants a strike'.

NEW YORK (AP) -- An analyst on Wednesday said he did not expect Boeing Co.'s talks with the International Association of Machinists to result in a strike and that economic uncertainty is reflected in the share price of the big aerospace company.

"It is our belief that neither side wants a strike," Jefferies & Co. analyst Howard A. Rubel said in a note. "The presentation that the IAM recently made to investors had a host of elements that overlap with the company's long-term goals. They include concerns over an aging workforce and excessive outsourcing."

The analyst said Boeing's offer of a 9 percent wage increase over the contract period plus an 11 percent increase in pensions puts it in the range of the union's demands.

The current contract expires Sept. 3.

Rubel also said there was a 60 percent chance that the 747-8 may be delayed by six months or more, which would result in an estimated cut to 2009 earnings of 10 cents per share. However, that possibility is within his forecast error, he said.

Shares rose 4 cents to $63.50 in premarket trading.

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