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Life Health > Health Insurance

6 Strikes That Cost Companies Millions

By Dan Berman

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The NFL’s labor impasse ended this week, but not before things got a bit messy. Commentators had a field day talking about the tarnished image of the stalwart league that many thought could do no wrong in the eyes of its fans.

Once it became apparent that those adoring fans wouldn’t long tolerate games decided by bumbling referees, the NFL and the officials settled. The long-term damage to the league will likely be negligible, and it’s doubtful the NFL lost any money.

The sport might be lucky in that regard. The history of labor strife in the United States has included riots, economic hardship and countless deaths from the coalmines of West Virginia and Kentucky to the steel mills of Pennsylvania and even The Los Angeles Times building.

The NFL’s mess got AdvisorOne wondering about strikes that have cost companies and others dearly in terms of money. Here is AdvisorOne’s list of 6 Strikes That Cost Companies Millions.

Great Hawaiin Sugar Strike of 1946.

Great Hawaiian Sugar Strike, 1946:
Cost:  $25.5 million ($203 million today, adjusted for inflation)

Hawaii might be best known as a paradise of the Pacific, but sugar industry workers were far from content in September 1946. They walked off the job in a call for better working conditions, pay, benefits and an end to racial inequality. Before the strike, the Big Five plantations were in total control. After, the International Longshore and Warehouse Union was in charge of benefits like medical and housing. In all, 26,000 workers went on strike. Ultimately, the sugar makers lost about $15 million ($118 million today) in revenue and had to increase pay and benefits to workers totaling $10.5 million ($85 million).

GE strikers walking a picket line in 1969.

General Electric, 1969:
Cost:  $79 million ($495 million today)

In 1969, workers for all unions associated with General Electric staged a strike seeking better wages and benefits. Maybe management thought the workers would never last long on the $25 a week they received in strike benefits. If so, management badly underestimated the will of the workers. The strike started in October 1969 and wasn’t settled until February 1970, more than 14 weeks later. In the end, GE’s fourth quarter profit dropped 85% from the previous year, and profit was off 22% for the year. Workers won wage increases of up to 6.5%, medical benefits, increased vacation and other concessions.

UPS strikers and police officers pushing each other in Massachusetts in 1997. (Photo: AP)

UPS, 1997:
Cost:  $650 million ($930 million today)

Tens of thousands of drivers for Big Brown, the United Parcel Service, struck the company in 1997. The strike lasted just 16 days, but the effects were devastating. Forget that the Teamsters managed to get everything they wanted, including, according to Florida’s Sun-Sentinel, that 2,000 fulltime jobs be created over a year’s time to eliminate many part-time jobs.

Management and workers might have expected things to get back to normal, but a year after the strike, the company had still not regained business lost to competitors like FedEx and, especially, the U.S. Postal Service. Also, about 60% of the workforce was still part-time and the company had laid off drivers to counteract falling revenue, according to the Sun-Sentinel.

Boeing strikers in 2008 on picket line outside Boeing's Everett, Wash., airplane plant. (Photo: AP)

Boeing, 2008:
Cost:  $2 billion ($2.1 billion today)

Machinists for Boeing called a strike of 27,000 workers in September 2008 in a bid to win job protections and to make sure they maintained their health care benefits. It took 52 days and workers lost an average of $7,000 in base pay, according to The New York Times, while the company lost $100 million a day in deferred revenue and delays to the 787 jumbo jet. In the end, the union was able to win assurances against factory layoffs as well as keep health benefits.

Grocery union employees in 2003 applauding settlement that ended strike. (Photo: AP)

California Supermarkets, 2003:
Cost:  $2 billion ($3.2 billion today)

Most people take for granted how easy it is to get food of almost any kind these days. But in 2003, Californians were faced with a strike by workers at three major chains—Albertson’s, Vons and Ralph’s—that hit 850 stores. The stores remained open, but customers were forced to cross picket lines. The 70,000 workers of the United Food and Commercial Workers Union were seeking to halt planned wage cuts and a shifting of a billion dollars in health care costs to workers.

The strike lasted 141 days, during which many customers took their business to other stores. The companies lost a collective $2 billion. In the end, the companies agreed to pay the full health benefits for two years. In the third year, employees would pay $5 a week. New hires would be paid less under a new wage tier.

Postal workers shouting on picket line in New York in 1970. (Photo: AP)

U.S. Postal Service, 1970:
Cost:  Untold amount to businesses

When postal workers went on strike in March 1970, the world was radically different. Businesses and residences relied on the mail service to pay bills, receive payments and correspond with clients, vendors, friends and relatives. There was no email, no mobile phones and the cost of long-distance telephone calls made them a luxury for many. So, when 200,000 postal workers walked off the job to protest low wages (the top pay was $8,400, which translates to $49,000 today), high benefit costs (workers paid half their health insurance premiums) and poor working conditions, it hurt the economy. Workers also were infuriated by a 4% raise from Congress, which gave itself a 41% pay bump.

President Richard Nixon called out the Reserves to deliver the mail. The move was a flop and after two weeks an agreement was reached with Congress to reorganize the Postal Service and give workers their overdue raise. The bill was signed into law by Nixon in August. It’s hard to imagine Congress moving that quickly these days.

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More Top 10 lists from AdvisorOne:

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