Boeing announced Sept. 16 that it will freeze hiring, reduce travel and consider temporary layoffs as part of efforts to conserve cash during a factory workers strike that began last week. The company outlined the measures in a memo to employees, emphasizing that they are necessary as “our business is in a difficult period,” the AP quoted it as saying.
The company will also cut spending on suppliers in response to the strike, which involved some 33,000 workers represented by the International Association of Machinists and Aerospace Workers. The workers went on strike after rejecting a proposed 25 percent pay rise over four years that did not meet their demand for a 40 percent increase.
Chief Financial Officer Brian West West outlined 10 immediate cost-cutting measures, including halting hiring at all levels, pausing pay increases for managers and executives and suspending all non-critical travel. “We are also considering the difficult step of furloughing many employees, managers and executives in the coming weeks,” West said, as quoted by Reuters.
Boeing faces challenges amid worker lawsuits and financial losses
BoeingBoeing’s financial situation has been a mess: The company has posted losses of more than $25 billion since 2019 and burned through $4.3 billion in the second quarter of 2024 alone. The ongoing strike, West says, is jeopardizing the company’s recovery. Delayed deliveries of new planes, a vital source of revenue, have added pressure to Boeing’s financial woes.
Negotiations between the company and the union are set to resume Tuesday with federal mediators. Union members have highlighted the loss of bonuses, pensions and other benefits as key points in their rejection of Boeing’s offer. Workers, including Nancie Browning, a veteran Boeing The employee expressed frustration and Browning responded: “We just want a piece of the pie like everyone else,” AP quoted him as saying.
Boeing Boeing is also facing potential credit rating downgrades, with Moody’s placing the company under review and Fitch warning that a strike lasting more than two weeks could increase the likelihood of a rating downgrade. Boeing’s current debt stands at $60 billion, further putting the company’s financial outlook in jeopardy.
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