Boeing, one of the largest aerospace companies in the world, has announced that it will be temporarily furloughing thousands of its U.S. executives, managers, and other staff members. This decision comes as a response to the ongoing machinist strike, as the company aims to preserve cash during this challenging time. The furloughs will impact tens of thousands of Boeing employees.
The strike began when over 30,000 machinists in the Seattle area and Oregon voted down a new labor contract and subsequently walked off the job. The workers cited concerns about the cost of living in the Seattle area and the lack of pension restoration as reasons for rejecting the contract offer. Despite Boeing’s offer of a 25% raise, the workers felt that it did not adequately address their financial needs.
Negotiations between the company and the union have been ongoing, with a mediator involved in the discussions. However, progress has been slow, leading to frustration on both sides. The union expressed their frustration in a statement, emphasizing their disappointment after a full day of mediation.
Boeing’s CEO, Kelly Ortberg, acknowledged the impact of the strike on the company and its employees. In a staff memo, he announced that affected employees would be furloughed for one week every four weeks for the duration of the strike. Ortberg also stated that he and his team would take “commensurate” pay cuts during this period. He emphasized that these measures were necessary to protect the company’s long-term future and navigate through the challenging circumstances.
Boeing’s CFO, Brian West, further explained the company’s cost-cutting measures. In addition to the furloughs, Boeing will freeze hiring and raises and temporarily let go of “non-essential contractors.” The financial impact of the strike will depend on its duration, but it adds to the existing pressure on Boeing’s leaders. The company has been dealing with safety and quality crises, including a door plug blowout incident earlier this year, as well as a significant amount of debt.
Despite the strike, Boeing will prioritize activities critical to safety, quality, customer support, and key certification programs. This includes the production of its 787 Dreamliners, which are manufactured in a nonunion facility in South Carolina. The company aims to ensure that essential operations continue uninterrupted.
In conclusion, Boeing’s decision to furlough thousands of employees is a direct response to the ongoing machinist strike. The strike, prompted by concerns about the cost of living and pension restoration, has put pressure on the company’s leaders to find ways to cut costs. While negotiations continue, Boeing is taking steps to preserve its long-term future and prioritize critical operations.
