Workers hold picket signs outside a Boeing Co. manufacturing plant during a strike on Friday, Sept. 13, 2024, in Everett, Washington, U.S.
M. Scott Brower | Bloomberg | Getty Images
boeing company Sweeping cost cuts were announced on Monday, including a hiring freeze, a suspension of non-essential employee travel and reductions in supplier spending to preserve cash in response to a strike by more than 30,000 factory workers.
Workers at Boeing plants, mostly in the Seattle area, went on strike early Friday after overwhelmingly rejecting a temporary labor deal that halted production of most of the company’s planes.
Chief Financial Officer Brian West said in a note to employees that the manufacturer will “significantly reduce” supplier spending and halt most purchases of its 737 Max, 767 and 777 jetliners Order. It’s the first clear sign of how the strike will affect the hundreds of suppliers that rely on Boeing’s work.
“We are working in good faith to reach a new contractual agreement that reflects their feedback and enables operations to resume,” West said in the report. “However, our business is going through a difficult period. This strike seriously jeopardizes As we recover, we must take the necessary actions to preserve cash and safeguard our collective future.”
He added that Boeing would not cut funding for safety, quality and direct customer support efforts.
Boeing factory workers and supporters gather on a picket line during the third day of a strike near the entrance to the Boeing production plant in Renton, Washington, U.S., September 15, 2024.
David Ryder | Reuters
The financial impact of the strike will depend on how long it lasts, but Boeing is focused on conserving cash, West said at a Morgan Stanley conference call on Friday. He said the company’s new chief executive, Kelly Ortberg, wanted to get back to the negotiating table immediately to reach a new deal.
“We are also considering the difficult step of temporarily furloughing many of our employees, managers and executives over the coming weeks,” West said.
Moody’s put all of Boeing’s credit ratings on review for downgrades on Friday, and Fitch Ratings said a prolonged strike could put Boeing at risk of a downgrade. That could push up borrowing costs for already heavily indebted manufacturers.
Boeing burned about $8 billion in the first half of this year after a near-catastrophic door panel explosion at the beginning of the year slowed production.
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