(qlmbusinessnews.com Tues. 17th Sept, 2024) London, UK —
Boeing Faces Spending Cuts and Potential Job Losses Amid Ongoing Strike
Boeing has announced immediate spending cuts and potential staff layoffs in response to a strike involving over 30,000 workers in the United States. The aerospace giant is taking steps to conserve cash as the industrial action threatens to worsen its already fragile financial situation.
The cost-cutting measures include a hiring freeze, substantial reductions in supplier spending, and a ban on non-essential travel, including first- and business-class trips for senior executives. Boeing says these measures are essential to preserving cash flow and securing the company’s long-term future during this difficult period.
In a letter to employees, Chief Financial Officer Brian West said, “This strike puts our recovery at significant risk, and we must take the necessary actions to safeguard our future.”
The strike began after workers in Washington State and Oregon rejected a four-year contract offer that included a 25% pay rise and improved working conditions. Despite being hailed by Boeing as a “historic” deal, the proposal was overwhelmingly voted down by employees.
Negotiations between Boeing and the workers’ union are set to resume on Tuesday. In the meantime, production of key aircraft, including the 737 Max, 777, and 767 freighters, has been disrupted by the walkouts.
Boeing has asked suppliers to pause shipments of parts for the affected planes, suspended non-essential capital spending, and halted payments to consultants. The company, which employs more than 170,000 people worldwide, mostly in the US, has also indicated that temporary furloughs for staff, managers, and executives may be necessary in the coming weeks.
The last major strike at Boeing, in 2008, lasted eight weeks and resulted in significant financial losses. While Boeing has not disclosed the potential impact of the current strike, analysts warn that it could cost the company billions if prolonged. Credit rating agencies have also suggested that Boeing's creditworthiness could be downgraded, leading to higher borrowing costs.
Boeing is already dealing with historic losses and slower production, driven by concerns over the quality of its manufacturing. The strike adds further pressure to the company as it tries to navigate a challenging recovery process.
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