Boeing Faces Spending Cuts and Possible Layoffs Amid Worker Strike

Boeing is implementing immediate spending cuts and has warned of potential temporary staff layoffs as it deals with a strike involving more than 30,000 workers in the US. The company has announced a hiring freeze, significant reductions in supplier spending, and a ban on non-essential travel, including for senior executives. These measures aim to preserve cash as the industrial dispute threatens Boeing’s already precarious financial situation.

Chief Financial Officer Brian West outlined the situation in a letter to staff, stating, “This strike jeopardizes our recovery in a significant way, and we must take necessary actions to preserve cash and safeguard our shared future.”

The strike began on Friday after workers in Washington State and Oregon overwhelmingly rejected a new four-year contract offer, despite union leaders recommending the deal. The proposal included a 25% pay increase over four years and improvements to terms and conditions. Boeing described the offer as “historic,” but it was not enough to secure employee approval.

The walkout has affected factories producing the 737 Max, the 777, and the 767 freighter. As a result, Boeing has asked suppliers to halt shipments of most parts for these planes, suspended non-essential capital spending, and frozen spending on consultants. The union has confirmed that negotiations are set to resume on Tuesday.

The duration of the strike will significantly impact Boeing and its suppliers. Analysts estimate that an extended stoppage could cost the company billions of dollars. The last major strike at Boeing in 2008 lasted about eight weeks, highlighting the potential financial toll if a resolution is not reached swiftly.