WASHINGTON – Boeing will temporarily furlough tens of thousands of employees after about 30,000 machinists went on strike on Sept 13, halting production of its 737 MAX and other airplanes.
“We are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees,” chief executive Kelly Ortberg said on Sept 18 in an email to employees. “We are planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike.”
Ms Ortberg also said he and other Boeing leaders “will take a commensurate pay reduction for the duration of the strike.”
The extensive furloughs – mandatory unpaid leaves of absence – show Ms Ortberg is preparing the company to weather a prolonged strike that is not likely to be easily resolved given the anger among rank-and-file workers.
The strike, Boeing’s first since 2008, adds to a tumultuous year for the planemaker which began when a door panel blew off a new 737 MAX jet in mid-air in January.
A protracted labour battle could cost Boeing several billion dollars, further straining finances and threatening its credit rating, analysts said.
“It’s unlikely that the cuts will fully offset the costs of a prolonged strike,” said Ben Tsocanos, aerospace director at S&P Global Ratings.
Boeing and the International Association of Machinists and Aerospace Workers (IAM) are talking in the presence of federal mediators. The union said on Sept 16 it was frustrated with the first day of mediation, which it said Boeing was not taking seriously.
The union has been pushing for a 40 per cent raise over four years in its first full contract negotiations with Boeing in 16 years, well above the planemaker’s offer of 25 per cent, which was resoundingly
