Staff 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 will temporarily furlough hundreds of U.S. executives, managers and other staff, citing the continuing machinist strike as the corporate races to preserve money, CEO Kelly Ortberg told employees Wednesday.
The furloughs will affect tens of hundreds of Boeing employees, an organization spokesperson said.
The plan got here lower than per week after Boeing’s greater than 30,000 machinists within the Seattle area and Oregon overwhelmingly voted down a recent labor contract and 96% voted to strike, walking off the job just after midnight on Friday.
Negotiations between the 2 sides continued this week with a mediator. Boeing had offered a 25% raise and the union endorsed the tentative contract. But some employees told CNBC that the contract offer was rejected since the raises weren’t sufficient enough to match the rise in the associated fee of living within the Seattle area and it didn’t restore their pensions.
“We is not going to mince words – after a full day of mediation, we’re frustrated,” the union said in an announcement Tuesday.
Ortberg, who has been within the job for slightly below six weeks, said in a staff memo that affected employees would take one week of furlough every 4 weeks for the strike’s duration and he and his team would take “commensurate” pay cuts through the strike.
“While this can be a tough decision that impacts everybody, it’s in an effort to preserve our long-term future and help us navigate through this very difficult time. We’ll proceed to transparently communicate as this dynamic situation evolves and do all we are able to to limit this hardship,” Ortberg said in his message.
Boeing’s CFO, Brian West, earlier this week said the corporate would freeze hiring and raises to chop costs, and would let “non-essential contractors” go temporarily.
The financial impact of the strike will depend how long it lasts, West said, nevertheless it adds to pressure on Boeing’s leaders, who try to maneuver the corporate past safety and quality crises, including the fallout from a near-catastrophic door plug blowout in January, and $60 billion in debt.
Ortberg said that “activities critical to our safety, quality, customer support and key certification programs will probably be prioritized and proceed” including production of its 787 Dreamliners, that are made in a nonunion facility in South Carolina.
