Boeing freezes hiring, instigates cost-cutting as strike continues
September 17, 2024
Last week we reported that Boeing was hit by strike action and with them continuing to feel the impact of the ongoing strike, the aerospace manufacturer is set to tighten its belt through a number of cash-preserving measures: including freezing hiring, reducing company travel, and “considering the difficult step of temporary furloughs for many employees” in the coming weeks.
In a memo to employees, executive vice president and chief financial officer Brian West explained that the strike – instigated last Friday and encompassing around 33,000 workers in Washington state – “jeopardizes [Boeing’s] recovery in a significant way”. Reaffirming that Boeing’s “business is in a difficult period,” he added that these “necessary measures” will “protect all funding for safety, quality and direct customer support work”.
A hiring freeze will now be instigated across all levels, with pay increases also on ice. The possibility of furloughing “many employees, managers and executives” is also being considered, West confirmed, alongside what he termed the temporary release of non-essential contractors.
Additionally, all Boeing company travel “not for critical customer, programme, regulatory or supply chain activity” is being eliminated, with any on-site team meetings requiring travel now to be conducted virtually. All first and business class air travel, including for the executive council, has also been halted.
However, the impact of the austerity measures will likely be felt by all employees, with a number of cuts to directly affect those working across the business. These including the pausing of employee recognition and team event spending, the cessation of catered meal and food services at Boeing facilities “unless customer related,” and the suspension of “non-essential capital expenditures and facilities spending”.
Members of the International Association of Machinists and Aerospace Workers (IAM) District 751 in Washington and W24 in Oregon overwhelmingly rejected a pay deal thrashed out with Boeing, which would have included a 25% pay rise over the next four years. Although Boeing described the contract as “historic” (with the IAM citing the proposal as the best it had negotiated in its history), workers subsequently rejected it; subsequently instigating strike action.
As new Boeing CEO Kelly Ortberg continues to grapple with the problems facing his company – not least the manufacturing issues and regulatory scrutiny instigated in the aftermath of the Alaska Airlines door plug blow-out – it seems Boeing’s road to recovery is going to continue to be a tough one.
