Third Bridge's head of global analysts, Peter McNally, talks to “The Big Money Show” about how the Boeing factory worker strike is affecting business.
Aircraft maker Boeing is dealing with ongoing strikes and a growing threat to profits, sending its shares lower on Monday.
In a letter to employees, Chief Financial Officer Blaine West outlined the risks the company faces and also announced a hiring freeze and the postponement of pay increases for salaried employees.
Read his memo to Boeing rank-and-file employees below.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| BA | Boeing | 156.18 | -0.57 |
-0.37% |
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Memo to Boeing Employees
team,
As you know, employees representing IAM 751 and W24 in the Pacific Northwest are on strike. We are working in good faith to reach a new contract agreement that incorporates employee feedback and allows us to resume operations.
However, our business is in a challenging period. This strike has significantly jeopardized our recovery and we must take the necessary steps to preserve cash and protect our shared future. It is critical that we protect all of the funding we have for our safety, quality and direct customer support operations.
Actions include:
- Boeing will impose a hiring freeze at all levels across the company and suspend pay increases for promotions for company executives and managers.
- Suspending travel except for essential customer, programmatic, regulatory and supply chain activities
- Eliminate all first and business class air travel, including for executive committee members
- Suspension of non-essential capital and facilities expenditures
- Stop spending on outside consultants and temporarily lay off non-essential contractors
- Suspension of charitable and other donations and advertising expenses
- Reduced corporate participation in air shows, trade shows and special events
- Pause spending on employee recognition and team events
- Suspending catering and meal services at Boeing facilities except where customer-related
- Cancel all off-site team meetings. Any on-site meetings that require travel should be virtual meetings.
In parallel with these actions, we are making significant reductions in spending with suppliers and will suspend most orders with suppliers for the 737, 767 and 777 programs. We are also considering the difficult step of furloughing many employees, managers and executives over the coming weeks.
We understand these measures will create uncertainty, concern and many questions. Once we have detailed guidance on the implementation of these measures, we will share additional information in the coming days.
Brian
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Boeing Stock Performance
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Boeing shares have fallen more than 40% this year compared with the S&P 500's rise of more than 17%.
