Boeing announced a series of cost-cutting measures as a strike by over 30,000 workers entered its fourth day with the aerospace giant implementing a hiring freeze, limited non-essential travel, and considering temporary furloughs for employees, managers, and executives in response to the ongoing labor dispute with the International Association of Machinists and Aerospace Workers (IAM).
Boeing CFO Brian West revealed the company's plans in a memo, expressing concerns about the strike’s impact on Boeing's financial recovery.
"This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future," West wrote.
The strike began after 33,000 IAM members overwhelmingly rejected a contract offer from Boeing, with 96% voting in favor of the work stoppage.
Union members are seeking improved wages and benefits, including the reinstatement of a defined-benefit pension plan that was eliminated a decade ago.
As part of the cost-saving measures, Boeing will pause issuing the majority of supplier purchase orders for its 737, 767, and 777 programs, further disrupting production.
Only the 787 Dreamliner will remain unaffected by the supplier freeze. This decision is expected to have ripple effects throughout the aerospace industry, with smaller suppliers facing potential layoffs as production grinds to a halt.
Boeing is already grappling with $60 billion in debt and other challenges, including safety concerns after a door panel flew off a 737 MAX plane earlier this year.
The strike, combined with these existing financial pressures, could lead to a further downgrade of Boeing's credit rating, which is currently hovering just above junk status.
While negotiations between the union and Boeing are set to resume with a federal mediator, union members are bracing for a lengthy strike.
Boeing workers on the picket lines expressed hope for a better deal but acknowledged that past negotiations have been slow and contentious.
"I can go for six weeks, eight weeks, but it's up to Boeing management to decide when they want to offer a fair deal," said Thinh Tan, an engineer at Boeing's 737 MAX facility.
Factory workers have long expressed frustration over wage stagnation, especially as inflation rises and executive bonuses continue to grow.
This is the eighth strike the IAM has staged against Boeing since the 1930s, with previous stoppages lasting up to 57 days.
For many workers, the strike is not just about pay but also about addressing a decade of unmet demands and ensuring a fairer future for Boeing’s workforce.
As Boeing faces mounting financial strain, the outcome of the negotiations will play a critical role in determining the company's ability to recover from both the strike and its broader production challenges.
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