Boeing Co. said it was freezing hiring for the next few weeks and considering layoffs to control costs after a strike by more than 30,000 workers who assemble planes at West Coast factories entered a fourth day on Monday.
“We know these actions will create uncertainty and concern,” Boeing Chief Financial Officer Brian West said in a letter to employees on Monday. “This strike severely jeopardizes our recovery and we must take the steps necessary to preserve cash and protect our shared future.”
Company and union negotiators are scheduled to resume talks on a collective agreement on Tuesday.
Boeing's largest union, the International Association of Machinists and Aerospace Workers (IAM), overwhelmingly rejected a contract last week that included a 25 percent pay increase over four years but eliminated annual performance bonuses.
Union leaders are scheduled to meet with a federal mediator and Boeing on Tuesday to resume labor negotiations. The IAM said in a post: posted to X social media feeds on Saturday.
John Holden, the union's chief negotiator, said Saturday that workers are asking Boeing to reinstate defined-benefit pension plans it eliminated a decade ago and increase its wage proposals in return for keeping plane production in Washington state.
Two union sources told Reuters they did not expect Boeing to reinstate the old pension plan but the demands could be used to negotiate higher company pension contributions and wage increases.
Union members who took to picket lines outside Boeing plants around Seattle were optimistic about the possibility of extracting better terms from the company, but few expect that to happen anytime soon.
“The way Boeing and the union have been negotiating in the past just doesn't work,” said Chris Ginn, 37, who builds 777 jets at a factory north of Seattle.
Strike 8
This is the eighth strike since IAM's Boeing division was founded in the 1930s. The last two strikes, in 2008 and 2005, lasted 57 and 28 days, respectively.
Reuters spoke to five workers who are using previous strikes as the basis for their financial planning because they don't get paid during the strike – the union is paying striking members $250 a week.
“We could take six or eight weeks off, but it's up to Boeing management to decide when to offer fair terms,” said Tinh Tang, an engineer at the 737 Max factory.
Many factory workers are unleashing anger that has been building for more than a decade as they watch wages fail to keep up with inflation and executive bonuses soar.
“Every paycheck I get I earn a living,” Ginn said, holding her son in one arm and a “Strike Against Boeing” sign in the other.
Even before factory workers were off the job, Boeing was grappling with a safety and production crisis triggered in January when a door panel on a nearly new 737 Max plane broke off in the air.
Fitch and Moody's echoed S&P Global Ratings in warning on Friday that a prolonged strike could lead to a downgrade of Boeing's ratings, which are burdened with $60 billion in debt.
Boeing is taking drastic measures to suspend hiring and conserve cash after about 33,000 workers went on strike on Friday and is considering furloughing many employees, managers and executives in the coming weeks.
“The strike significantly puts our recovery at risk and we must take the steps necessary to preserve cash and protect our shared future,” Boeing Chief Financial Officer Brian West said in a statement.
In addition to a company-wide hiring freeze, Boeing plans to halt most employee travel, suspend non-essential capital and facilities spending and “significantly reduce supplier spending and halt most supplier orders for the 737, 767 and 777 programs.”
