Boeing Furloughs Thousands Amid Machinist Strike

Boeing’s CFO Brian West announced hiring and raise freezes, plus temporary contractor layoffs after 30,000 machinists voted to strike

CEO Kelly Ortberg told workers Wednesday that Boeing will temporarily lay off thousands of U.S. executives, managers, and other staff because of the ongoing machinists’ strike. The company is trying to save money.

A spokesperson for the company said that the layoffs will touch tens of thousands of Boeing workers.

Not long ago, more than 30,000 Boeing machinists in the Seattle area and Oregon voted against a new labor deal by a large majority. They also chose to go on strike, and just after midnight on Friday, they quit their jobs.

This week, talks between the two sides continued with the help of a mediator. Boeing offered a 25% raise, and the union agreed to the initial deal. However, some workers told CNBC that the contract deal was turned down because the raises weren’t enough to keep up with the rising cost of living in Seattle, and their pensions weren’t restored.

The union said in a statement Tuesday, “We will not mince words: after a full day of mediation, we are unhappy.”

In a staff memo, Ortberg, who has been on the job for under six weeks, said that workers the strike would touch would get one week off every four weeks and that he and his team would be paid less during the strike.

„This is a tough choice that affects everyone, but it’s necessary to protect our long-term future and help us overcome this very tough time. “We will keep openly communicating as this situation changes, and we will do everything we can to make this easier,” Ortberg wrote in his message.

This week, Boeing’s CFO, Brian West, said that the company would briefly fire “non-essential contractors” and stop hiring new people and giving raises to save money.

West said the strike’s effect on the company’s finances will depend on how long it lasts. However, it adds to the pressure on Boeing’s leaders, who are already dealing with safety and quality issues, such as the fallout from a nearly catastrophic door plug blowout in January and $60 billion in debt.

Ortberg said, “Activities critical to our safety, quality, customer support, and key certification programs will be prioritized and continue.” One of these is making the 787 Dreamliners, which are done in a South Carolina factory that is not a union shop.