Embattled aircraft manufacturer Boeing is to eliminate all First and Business Class travel for employees, including senior executives, and is even considering furloughing workers as it desperately looks for ways to conserve cash as machinists in Portland and the Seattle area continue their strike in a dispute over pay and conditions.
In a leaked memo sent to Boeing staffers on Monday morning, the manufacturer’s vice president and chief financial officer, Brian West, warned that the strike “jeopardized” the company’s recovery in a “significant way” after years of setbacks and controversy with its commercial jet division.
“We must take necessary actions to preserve cash and safeguard our shared future,” West told employees as he set out a series of measures that Boeing would take to curtail costs as the strike enters its fourth day.
Along with plans to only book employees in coach for future flights, West said Boeing had already initiated a hiring freeze at all levels and stopped all but the most essential of travel.
Boeing also plans to stop working with outside contractors until the dispute is resolved and has decided to halt charitable spending. Marketing and advertising is also being paused, and West says Boeing will withdraw from future airshows and events until it gets its finances back in order.
“In parallel to the steps above, we are planning to make significant reductions in supplier expenditures and will stop issuing the majority of supplier purchase orders on the 737, 767 and 777 programs,” West’s memo continued.
“We are also considering the difficult step of temporary furloughs for many employees, managers, and executives in the coming weeks.”
Boeing has been left reeling by the decision of factory workers represented by the IAM 751 union who build commercial aircraft in the Puget Sound area, including the best-selling 737MAX, to go on strike after they rejected a tentative new contract by 94.6% on Thursday night.
Boeing had promised its ‘largest-ever’ general wage increase of 25%, along with a slew of other improvements, including enhanced retirement, improved healthcare provisions, and better work-life balance.
In response to the overwhelming result to go on strike, Boeing admitted that the “message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members.”
The manufacturer added that it was “committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.”
Over the weekend, the Federal Mediation and Conciliation Service said it would be working with Boeing and IAM to resume bargaining this week in a bid to resolve the dispute and get workers back to the factory floor.
