Boeing will cut spending as strike takes financial toll
Days after thousands of employees went on strike, Boeing said on Monday that it would freeze hiring and cut spending, halting production of its most popular commercial jet. Union leaders called for more than 33,000 Boeing workers to go on strike on Friday, after members voted overwhelmingly to reject a tentative contract negotiated by their union and company management. The walkout brought production of the 737 Max and other planes to a virtual halt, hampering Boeing’s recovery from a safety crisis after a panel blew off one of its planes during a passenger flight in January. The company is “working in good faith to reach a new contract agreement,” but needs to take steps to rein in spending during the walkout, Brian West, Boeing’s CFO, wrote in a message to employees on Monday. “Our business is in a difficult period,” he said. “This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.” West said Boeing would protect funding for safety, quality and customer support while cutting spending in other areas. In addition to pausing hiring, the company froze nonessential travel and eliminated first- and business-class air travel for top executives. Boeing also limited spending on consultants, advertising, marketing, charitable giving and on-site catering, and it is considering temporary furloughs for rank-and-file workers, managers and executives. West said Boeing was also planning to cut supplier spending, a move that could have prolonged consequences. The aerospace supply chain is fragile, and cost-cutting can imperil smaller vendors to larger manufacturers like Boeing or its main rival, Airbus. The supplier spending cuts include stopping most orders for parts used in Boeing’s 737, 767 and 777 airplanes, West said. It is not clear how long the strike will last, but ending it will not be easy. In a vote on Thursday, nearly 95% of Boeing workers represented by the International Association of Machinists and Aerospace Workers rejected the tentative contract, while a slightly larger share voted in favor of a strike. Many members were dissatisfied by the size of raises and retirement benefits in the proposed contract.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-09-17/general/boeing-will-cut-spending-as-strike-takes-financial-toll
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Boeing will cut spending as strike takes financial toll
Days after thousands of employees went on strike, Boeing said on Monday that it would freeze hiring and cut spending, halting production of its most popular commercial jet. Union leaders called for more than 33,000 Boeing workers to go on strike on Friday, after members voted overwhelmingly to reject a tentative contract negotiated by their union and company management. The walkout brought production of the 737 Max and other planes to a virtual halt, hampering Boeing’s recovery from a safety crisis after a panel blew off one of its planes during a passenger flight in January. The company is “working in good faith to reach a new contract agreement,” but needs to take steps to rein in spending during the walkout, Brian West, Boeing’s CFO, wrote in a message to employees on Monday. “Our business is in a difficult period,” he said. “This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.” West said Boeing would protect funding for safety, quality and customer support while cutting spending in other areas. In addition to pausing hiring, the company froze nonessential travel and eliminated first- and business-class air travel for top executives. Boeing also limited spending on consultants, advertising, marketing, charitable giving and on-site catering, and it is considering temporary furloughs for rank-and-file workers, managers and executives. West said Boeing was also planning to cut supplier spending, a move that could have prolonged consequences. The aerospace supply chain is fragile, and cost-cutting can imperil smaller vendors to larger manufacturers like Boeing or its main rival, Airbus. The supplier spending cuts include stopping most orders for parts used in Boeing’s 737, 767 and 777 airplanes, West said. It is not clear how long the strike will last, but ending it will not be easy. In a vote on Thursday, nearly 95% of Boeing workers represented by the International Association of Machinists and Aerospace Workers rejected the tentative contract, while a slightly larger share voted in favor of a strike. Many members were dissatisfied by the size of raises and retirement benefits in the proposed contract.<br/>
