Boeing is taking drastic measures to save cash during a factory workers’ strike, including freezing hiring, reducing travel, and considering temporary layoffs. Chief Financial Officer Brian West outlined 10 immediate cutbacks in a memo to employees, citing the company’s difficult financial situation. About 33,000 workers represented by the International Association of Machinists and Aerospace Workers began a strike after rejecting an offer of a 25% pay increase over four years.
Representatives from Boeing and the union are scheduled to meet with federal mediators to discuss a new contract. Striking workers are picketing at various locations in Washington state, Oregon, and California. The issue of bonuses has become a contentious point in negotiations, with workers demanding the reinstatement of annual bonuses that have been omitted from recent contract extensions. Boeing is proposing to replace bonuses with automatic contributions to employees’ 401(k) accounts.
Boeing has faced significant financial losses in recent years, with over $25 billion lost since the start of 2019 and $4.3 billion burned through in the second quarter of 2024. The strike is further impacting the company’s cash flow by delaying deliveries of new planes. Stephanie Pope, the head of Boeing’s commercial-airplanes division, has emphasized the company’s substantial debt in urging workers to accept the contract offer, which they ultimately rejected.
Additional cost-cutting measures outlined in the CFO’s memo include eliminating first- and business-class service for critical travel, stopping spending on outside consultants, and reducing supplier expenditures. Moody’s and Fitch have both put Boeing on review for a possible credit downgrade due to the strike’s impact on the company’s financial outlook. Despite the company’s efforts to address its financial challenges, the strike continues to disrupt operations and delay production.
Workers on the picket line in Everett, Washington, express frustration over the proposed contract offer and the loss of benefits such as pensions and healthcare. They argue for fair compensation and benefits, criticizing Boeing executives for their perceived excess while workers struggle. The strike presents challenges for both the company and its employees, highlighting the ongoing tensions in labor negotiations and the importance of finding a resolution to mitigate the impact on Boeing’s financial stability.
