OAN Staff James Meyers
8:15 AM – Thursday, September 19, 2024
On Wednesday, Boeing’s CEO announced that the company will begin furloughing “a large number” of employees to limit spending during the strike by union machinists that began just a week ago.
The people who have been forced to take time off without pay in the coming days include executives, managers and other employees based in the United States, according to Chief Executive Kelly Ortberg.
“While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time,” Ortberg said in a company-wide message to staff.
Meanwhile, the aircraft maker didn’t specify the number of people who will be furloughed, but the number is expected to be in the tens of thousands. Meanwhile, the company had 171,000 employees at the start of the year.
The furlough announcement comes after close to 33,000 Boeing factory workers in the Seattle area began a strike Friday, after rejecting a proposal to raise their pay by 25% over four years. The striking workers want raises of at least 40%, the return of a traditional pension plan and other benefits in the contract offer they voted down.
As a result, the strike is stopping production of several airplane models including Boeing’s top selling plane, the 737 Max. The company gets more than half of the purchase price when new planes are delivered to buyers, so the strike will directly impact Boeing’s cash flow.
Additionally, Ortberg said the selected employees will be furloughed for one week every four weeks while retaining their benefits. The CEO and other senior executives will take pay cuts as well during the strike, without detailing how much the cuts will be.
Furthermore, Ortberg said in a memo to employees that the company is in talks with the International Association of Machinists and Aerospace Workers about a new contract agreement that could be ratified.
“However, with production paused across many key programs in the Pacific Northwest, our business faces substantial challenges and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” he said.
The employees were told by Boeing’s chief financial officer earlier this week that furloughs were a real possibility.
To cut back on costs, the company is cutting spending on suppliers and eliminating most travel.
Despite two full days of talks assisted by the Conciliation Service and the Federal Mediation, the union stated on Wednesday that a deal had not been reached and additional negotiations had not been scheduled.
The striking workers are picketing at multiple locations in Seattle, California and Oregon. The union is surveying the picketing workers to learn what they want in a new contract.
The union’s last strike at Boeing was in 2008.
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