With a massive ongoing strike, Boeing is making some temporary cutbacks that could hit non-union staff hard.
Boeing Chief Financial Officer Brian West on Monday announced the company is instituting a freeze on hiring and non-essential travel, and it will consider furloughs for employees, managers, and executives.
The company is temporarily restricting first-class and business travel, including for Boeing executives – although the company didn’t comment on whether top brass will still be able to use private corporate jets.
West’s memo was a direct response to the ongoing strike with the International Association of Machinists and Aerospace Workers union. On Friday, 33,000 IAM union workers walked off the job after 95% of rank-and-file members voted down the deal reached between leadership and Boeing – and 96% voted to strike, shutting down production at one of America’s largest manufacturers and exporters.
“This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future,” West said in the memo.
The company will also reduce charitable contributions, stop catering at Boeing facilities, and pause participation in trade shows and events. As part of the hiring freeze, the company is pausing pay increases for promotions. Even as negotiations between the union and the company are scheduled to resume this week with a federal mediator.
Boeing is also planning to reduce spending with some of its 10,000 suppliers, West said in his memo.
“[We] will stop issuing the majority of supplier purchase orders on the 737, 767 and 777 programs,” he wrote.
Boeing is on weak financial footing and has lost $33 billion since 2019. On Friday, the credit rating agencies Fitch and Moody’s noted that a downgrade of Boeing’s credit rating into junk bond status is on the horizon.
