On Wednesday, Boeing announced it would temporarily lay off a “significant number” of white-collar workers. The news comes after nearly 30,000 Boeing workers went on strike on Friday after rejecting a new pay contract.
Kelly Ortberg, CEO of Boeing, wrote in an email to employees Kelly Ortberg:
The elected officials will take one week off every four weeks on a regular basis, Ortberg wrote. Employees will receive information on how their specific group is affected on the same day. The memo did not specify how many employees would be affected.
In the email, Ortberg also said he and his leadership team will “reduce equal wages for the duration of the strike.” The memo did not specify the size of the cut salary.
The furloughs are intended to save money as the strike halts production of critical planes like the 737 MAX.
In labor elections on September 12, workers chose against the agreement that Boeing and the union for machinists and flight attendants had submitted a proposal. The vote was the first comprehensive contract vote in 16 years and it did not favor Boeing: about 95% voted to reject the contract and 96% voted in favor of strikes.
The strike is another headache for the American aircraft manufacturer, ie argue with safety and reputation issues after taking several hits this year. It’s also a big blow to Ortberg, who stepped into his role as CEO two months ago.
Savings is important for heavily indebted Boeing, which knows all too well how costly strikes can be. Boeing’s the last strike, in 2008, it continued for almost two months, which caused the company to deliver 70 fewer planes than usual to the affected segment. The walkout cut revenue during that period by $4.3 billion, Boeing said at the time.
Along with the furloughs, the company has barred workers and managers from flying business units, placed a hiring freeze, and suspended salary increases for executives, according to a separate memo sent to employees on Monday.
Boeing did not immediately respond to a request for comment from Business Insider sent outside regular business hours.
Read Ortberg’s full memo sent to employees:
group, As you know, IAM 751 and W24 went on strike last Friday. We remain committed to repairing our relationship with our wait staff and continuing negotiations with the union to reach a new agreement that benefits all our colleagues and our company as soon as possible. possible.
However, with production halted across many critical programs in the Pacific Northwest, our business is facing significant challenges and it is imperative that we take drastic measures to save money and ensure Boeing is able to recover successfully.
As part of this initiative, we are launching interim benefits in the coming days that will affect a large number of US executives, managers and employees. All benefits will continue for affected employees, and to minimize the impact on you, we are planning for selected employees to take one week of severance every four weeks in the entire duration of the strike. Your leaders will be in touch today to share more information about your team’s unique approach.
Along with these measures, my leadership team and I will be reducing wages for the duration of the strike.
Most importantly, we will not take any steps that hinder our ability to fully recover in the future. All activities critical to our safety, quality, customer support and critical certification programs will be prioritized and continued, including the 787 production.
Although this is a difficult decision that affects everyone, it is in an effort to secure our long-term future and help us get through this very difficult time. We will continue to communicate openly as this critical situation evolves and do everything we can to mitigate these issues.
To restore hope,
Kelly
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