Financial Planning

Boeing: Job Cuts as a Temporary Solution of Factory Worker Strike

Irfan Ameer
Irfan Ameer
6 Min Read

Boeing plans to effectively freeze in hiring and reduce the rate of travel. It is also considering temporary layoffs. This is being done to save cash during a factory workers’ strike that began last week. This is what the company told employees Monday. The company stated that the moves, which include the reduced spending on suppliers, were necessary. This is because the business was in a difficult period.

Contents
More on Boeing…What Comes into Place About the Boeing Decision?What will be put up by Boeing now?

Along with it, the Chief financial officer Brian West also detailed around 10 immediate cutbacks in a memo to employees. These include a freeze on hiring across all levels, thus pausing the pay. This is because it increases for managers and executives who get promoted, and the, gets into stopping all travel that isn’t critical.

“We are also considering the difficult step of temporary furloughs for many employees, managers, and executives in the coming weeks,” West said.

Boeing business is in a difficult spot, he said, adding: “This strike jeopardizes our recovery in a significant way.”

More on Boeing…

Also, it has come to news that about 33,000 workers who were represented by the International Association of Machinists and Aerospace Workers began a strike early Friday. The walkout came after workers rejected an offer of a 25 percent increase in pay over four years. Just because of this, the union originally sought a pay hike of at least a figure of around 40 percent.

Plus, the representatives of the company and the union are scheduled to meet on Tuesday. This is to be done with federal mediators. Plus, the union has also started to survey its members to learn what they want most in a new contract. It has also come to news that with accordance to the Boeing strike, the striking workers are picketing at several locations around the Washington state, Oregon and California.

What Comes into Place About the Boeing Decision?

Outside Boeing’s factory in Everett, Wash., Nancie Browning, a materials management specialist for more than 17 years, said last week’s offer was worse than the one that prompted a two-month strike in 2008. She said that without annual bonuses that workers have come to depend on, the proposed pay increase was more like nine percent, not 25 percent.

“We just want a piece of the pie like everybody else,” she said. “Why should we work all this overtime and bust our backs while these guys [Boeing executives] are sitting up in their suites just raking in the cash?”

The bonuses have steadily emerged as a flash point for union members. The workers in this state that they range from $3,000 to $5,000 US a year.

Boeing says it is difficult to calculate bonuses. Especially, in a way that is fair to 33,000 people who perform different jobs. So, the company is into proposing to ditch the payouts and replace them with automatic contributions of $4,160 per year to each employee’s 401(k) retirement account.

Plus, the workers are bitter with regards to contract extensions over the past 16 years. This is when Boeing ended its traditional pension plan and lowered health-care benefits.

“We want our pension back,” said Jacob Bustad, a machinist with Boeing for 14 years who was also on the picket line in Everett. “We just keep losing, and we never gain, while the people at the top just get more and more money. Boeing has done good for me and my family, but these last years have been hard.”

What will be put up by Boeing now?

Boeing has lost more than $25 billion US since the start of 2019. Plus, it has burned through $4.3 billion in the second quarter of 2024 alone. This was done as it stood poised to post another money-losing year. This strike will in the long run. It will delay deliveries of new planes, which are an essential source of cash for the company.

Stephanie Pope, the head of Boeing’s commercial airplanes division, urged blue-collar workers to accept the contract offer last week. She cited the company’s $60 billion in total debt. Along with it, it also called it the best offer Boeing had ever madewas en. This is endorsed by the union’s local president and negotiators.

However, the workers have rejected the recommendation of their own leaders. This had never happened since 1995.

Plus, the additional cost-cutting moves spelled out in the chief financial officer’s memo included the effective elimination of first- and business-class service for anyone on travel. This was especially for the people who were deemed non-critical, thus stopping the rate of spending on outside consultants.

West also said that Boeing plans to make “significant reductions in supplier expenditures” and will stop most supplier purchase orders related to the 737, 767, and 777 airplane models.

After the strike started, the credit rating company Moody’s reviewed Boeing. This was done for a possible amount of credit downgrade. Also, while the credit agency Fitch said a strike lasting longer than two weeks would make a downgrade more likely. Both agencies rate Boeing’s debt one notch above non-investment or junk status.

TAGGED: , , , , , , , , , , , , , , , , ,
Share This Article
229 Comments
Lost your password?