Update: Rolling Furloughs Are Next For WA Employees of Boeing

Boeing Faces Major Financial Strain Amid Machinists Strike 

Boeing is facing significant challenges as over 33,000 workers in the Seattle area, represented by the International Association of Machinists and Aerospace Workers' Union (IAM), have gone on strike. The strike began after workers overwhelmingly rejected a tentative contract proposal from Boeing, with their main demand being a 40% pay raise. This labor action is expected to severely impact Boeing’s recovery efforts and delay aircraft deliveries, further compounding the company's financial woes. 

Furloughs

In response to the strike, Boeing's CEO, Kelly Ortberg, who recently assumed the role and purchased a $4.1 million home in Seattle, has announced a series of cost-saving measures. Among the most significant is a plan for temporary furloughs, which will affect many U.S.-based executives, managers, and employees. Under this plan, furloughed workers will be required to take one week off every four weeks during the strike, though benefits will continue for these employees. Additionally, Ortberg and his leadership team have promised to take a pay reduction, though specific details about the cuts have yet to be revealed. 

Paycheck to Paycheck

Despite these measures, tensions are high among Boeing workers, who have expressed frustration over the company’s ability to pay its CEO generously while many of them continue to live paycheck to paycheck. This has been a central issue voiced by union members on picket lines in the Seattle area, highlighting the growing dissatisfaction with income inequality within the company. 

Boeing CFO Brian West acknowledged the uncertainty these cuts will create but emphasized the need to take action to protect the company’s future. Boeing has introduced further cost-saving measures aimed at preserving cash during the strike, including: 

• Hiring freeze across all levels. 
• Pausing pay increases for executives and managers. 
• Stopping non-critical travel. 
• Eliminating first- and business-class travel for the executive council. 
• Suspending nonessential capital expenditures and facilities spending. 
• Halting the use of external consultants and releasing nonessential contractors. 
• Pausing charitable contributions and advertising/marketing expenditures. 
• Reducing participation in airshows, tradeshows, and events. 
• Stopping employee recognition and team event spending. 
• Canceling catered meals except for customer-related events. 
• Moving off-site meetings to virtual and canceling non-critical in-person meetings. 

Although the strike has halted much of Boeing’s production, Ortberg has emphasized that the production of the Boeing 787 will continue as a priority. He is committed to guiding the company through the crisis and ensuring its ability to recover once the strike concludes.