Boeing plans to temporarily lay off tens of thousands of employees due to a strike by about 30,000 machinists, halting production of critical aircraft like the 737 MAX.
The CEO announced a rolling furlough plan while executives will also take pay reductions, indicating preparations for a prolonged strike, which could cost the company billions and impact credit ratings.
The machinists’ union is unhappy with ongoing mediation efforts, rejecting Boeing’s offer of a 25pc raise over four years, while pushing for a 40pc increase.
The strike is causing production delays, impacting suppliers, and leading to Boeing freezing hiring and halting most orders for parts, as the company already holds $60bn in debt and shares have declined significantly this year.
The company employs 150,000 people in the US and has cancelled orders for parts, which will have implications for suppliers.
CEO Kelly Ortberg said in an email to employees “we are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees. We are planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike, The company will not take any “actions that inhibit our ability to fully recover in the future. All activities critical to our safety, quality, customer support and key certification programs will be prioritized and continue, including 787 production.”
Brian Bryant, IAM’s international president, said “the ball is in Boeing’s court. They could settle this strike tomorrow with fair pay, pension, restoring a bonus and health insurance. While we remain open to further discussions, whether directly or through mediation, currently, there are no additional dates scheduled. We are fully committed to fighting for the contract our members deserve.”
