Employees with picket signs outside the Boeing Co. manufacturing facility during a strike in Everett, Washington, US, on Friday, Sept. 13, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Boeing announced sweeping cost cuts Monday, including a hiring freeze, a pause on nonessential staff travel and a discount on supplier spending to preserve money because it deals with a strike by greater than 30,000 factory employees.
Boeing factory employees, mostly within the Seattle area, began walking off the job early Friday after overwhelmingly rejecting a tentative labor deal, halting most of Boeing’s aircraft production.
The manufacturer will make “significant reductions” to supplier spending and stop most purchase orders for its 737 Max, 767 and 777 jetliners, CFO Brian West said in a note to staff. It was the primary clear sign of how the strike will affect the a whole lot of suppliers that depend on Boeing work.
“We’re working in good faith to achieve a recent contract agreement that reflects their feedback and enables operations to resume,” West said in his note. “Nevertheless, our business is in a difficult period. This strike jeopardizes our recovery in a big way and we must take mandatory actions to preserve money and safeguard our shared future.”
He added that Boeing shouldn’t be making cuts to funding for safety, quality and direct customer support work.
Boeing factory employees and supporters gather on a picket line throughout the third day of a strike near the doorway to a Boeing production facility in Renton, Washington, U.S. September 15, 2024.
David Ryder | Reuters
The financial impact of the strike will rely upon how long it lasts, but Boeing is concentrated on conserving money, West said at a Morgan Stanley conference Friday. He said the corporate’s recent CEO, Kelly Ortberg, desires to get back to the bargaining table immediately to achieve a recent deal.
“We’re also considering the difficult step of temporary furloughs for a lot of employees, managers and executives in the approaching weeks,” West said.
On Friday, Moody’s put all of Boeing’s credit rankings on review for a downgrade and Fitch Rankings said a chronic strike could put Boeing susceptible to a downgrade. That would drive up the borrowing costs of a manufacturer that already has mounting debt.
Boeing burned about $8 billion in the primary half of the 12 months as production slowed within the wake of a near-catastrophic door-panel blowout initially of the 12 months.
