In order to keep its cash, Boeing is laying off a large amount of employees to conserve cash while the union machinists are on strike. It’s across the board. Chief Executive Kelly Ortberg is requiring executives to take time off without pay as well as those on the lower end of the pay scale. The company didn’t say how many will be included in the rolling furloughs. The estimate is many thousands.
Boeing needs money
Ortberg sent out a company wide message. “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.” At the start of the year the company had 171,000 employees. A strike was begun Friday after 33,000 employees asked for a pay raise of 25% over four years and it was rejected.
Boeing might not be able to afford what the employees want. They want a raise of at least 40% and to go back to a traditional pension plan among other requests.
Boeing needs to watch its bottom line
Due to the strike, production has halted on a number of models, including their best seller, the 737 Max. The down payment for a delivered plane is over half the purchase price so Boeing will lose money quickly.
Selected employees will retain benefits while on leave. Their furlough will be one week for every four weeks. Executives will be taking pay cuts but the amount of those cuts wasn’t disclosed.
The Boeing furloughs
Positions relating to safety, quality, customer service and new plane certification will continue. This includes the production of the 787 Dreamliners which are built by non union employees in South Carolina.
Ortberg sent out a memo to employees, saying they’re in talks with the International Association of Machinists and Aerospace Workers to try to hammer out an agreement.
“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.”
