Boeing’s CEO said Wednesday the company will furlough a large number of workers to save money during the union machinists’ strike that began last week.
General Manager Kelly Ortberg said the layoffs would be temporary and would affect executives, managers and other employees.
About 33,000 Boeing factory workers in the Pacific Northwest started a strike Friday after they rejected a proposal to raise wages by 25% over four years. They want increases of at least 40% and other improvements in the deal they voted down.
The furloughs are expected to affect tens of thousands of Boeing workers. Ortberg said employees will be furloughed for one week every four weeks and that he and other senior executives will take pay cuts during the strike.
The strike is halting production of several Boeing models, including its best-selling plane, the 737 Max. The company gets more than half the purchase price when new planes are delivered to buyers, so the strike will quickly hurt Boeing’s cash flow.
Ortberg said in a memo to employees that the company is in discussions with the International Association of Machinists and Aerospace Workers about a new contract agreement that could be ratified.
“But with production halted on many key programs in the Pacific Northwest, our company faces significant challenges. It’s important that we take difficult steps to save money and ensure Boeing can recover successfully,” he said.
Boeing’s chief financial officer warned workers earlier this week that temporary layoffs were possible. The company, which is based in Arlington, Virginia, but does most of its commercial aircraft business in the Pacific Northwest, is also cutting spending on suppliers, freezing hiring and canceling most travel.
