Boeing has announced plans to temporarily furlough tens of thousands of employees following a strike by 30,000 machinists on Friday, which brought production of the 737 MAX and other aircraft to a standstill.
CEO Kelly Ortberg informed the employees, “We are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees.”
“We are planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike,” he added.
Ortberg also stated that he and other Boeing executives “will take a commensurate pay reduction for the duration of the strike.”
The widespread furloughs indicate that Ortberg is preparing the company for a potentially lengthy strike, which may be difficult to resolve due to growing discontent among rank-and-file workers. This strike, Boeing’s first since 2008, adds to what has already been a turbulent year for the company, beginning with a mid-air incident in January when a door panel detached from a new 737 MAX jet.
The company employs approximately 150,000 people in the US, though it remains unclear which specific employees are impacted by the furloughs. According to a union representing Boeing’s engineers, their members are not affected.
The six-day-old strike poses risks for Boeing’s extensive network of suppliers, with some considering furloughs as well, Reuters reported citing several sources.
The strike has halted production of Boeing’s top-selling 737 MAX jets, as well as its 777 and 767 widebody aircraft, causing delays in deliveries to airlines. Boeing announced it is freezing hiring to reduce costs, citing its already heavy balance sheet burdened with $60 billion in debt.
(With Reuters inputs)