Boeing, the plane manufacturer, has alerted its staff of a hiring halt and potential temporary layoffs, following a fourth consecutive day of strikes. Staff, part of a 33,000-strong union, began taking industrial action last week, pushing for better pay and improved working conditions. Brian West, the CFO, warned that this disruption could significantly delay the firm’s recovery and necessitate cash conservation measures.
Over recent years, Boeing has faced struggles, in no small part due to its own failings, admitted Kelly Ortberg, newly appointed CEO, a week ago. An extended strike could cause serious interference to Boeing’s customer deliveries, which include Irish airline Ryanair, placing its cash flow and investment-grade credit rating at risk.
Boeing has announced plans to halt the majority of purchases from suppliers to its 737 Max, 767, and 777 jets, each assembled in the Washington factories currently on strike. This proves to be a setback for an already teetering aerospace supply chain, with the likelihood of impacts on Boeing’s competition, Airbus, as numerous businesses supply both manufacturers.
Furthermore, Boeing is implementing a freeze on hiring and non-essential travel and capital expenses, mentioned Mr West, and is “contemplating the challenging action of temporary layoffs for numerous employees, managers and executives in the imminent weeks.”
The strike was initiated on Friday when 96% of the International Association of Machinists and Aerospace Workers District 751 members voted down a preliminary agreement suggested by the union’s negotiation team. The agreement included a 25% pay increase over a period of four years, enhanced retirement and healthcare perks, and amplified influence on quality and safety. Boeing also consented to build the succeeding jetliner in Washington if it is instigated during the four-year contract term, a crucial clause for job security.
However, the proposed agreement eradicated an annual bonus and did not meet the union’s original demand for a 40% pay increase. Over the last eight years, union member wages have increased by a mere 4% while inflation has surged to the highest level in decades. Numerous machinists are still infuriated about a 2014 negotiation that ended their defined benefit pensions after the company intimated it would transfer work from Washington to its non-union plant located in South Carolina.
Boeing is currently grappling with industrial action, as their employees have proceeded to strike. Retired machinist, Matthew Goetz, picketing in Renton, Washington, sported a placard from a similar worker’s strike that occurred in 1989, listing several others he has experienced. With the ever-increasing cost of living, Goetz stated that any negotiations should focus on enhanced remuneration and benefits.
During his four-decade stint at Boeing, Goetz witnessed fluctuating esteem for the workforce, with staff generally considered just another business asset. Dave Calhoun, the former CEO, recently raked in around $33 million (around €29.7 million). The company’s performance tanked under him, but still he was awarded pay hikes and a windfall of bonuses. Goetz wasn’t convinced by Boeing’s plea of meagre resources after this.
Over the course of the weekend, the union revealed it was polling members to ascertain the salient issues for future negotiations. In order to revisit the discussion, a meeting had been scheduled for Tuesday with federal mediators and Boeing officials. – Rights Fall to The Financial Times Limited 2024.