RENTON, Wash. — Boeing released a list of spending cuts Monday morning that are intended to preserve cash during an ongoing machinists strike that is expected to hurt the aerospace company's bottom line.
The IAM District 751 Machinists Union is currently on strike over a contract dispute with the company. The machinists are looking for a 40% increase in pay and reinstatement of pensions that were axed by Boeing in 2014, among other demands. Boeing and union negotiators had previously announced a tentative agreement - but it was nearly unanimously rejected later that week, with 94% of members voting to reject the contract proposal and 96% then voting to go on strike.
The machinists union represents a large proportion of employees at the company, with more than 30,000 members. Work on the company's aircraft production has essentially halted, and could delay jet deliveries even further.
"Our business is in a difficult period," said Boeing Chief Financial Officer Brian West. "This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future."
Work on safety, quality and direct customer support will not be impacted by the cuts.
The said they are also considering temporary furloughs "for many employees, managers and executives in the coming weeks."
Here's where Boeing is cutting spending during the machinists strike:
- Boeing is instituting a hiring freeze across all levels and pausing pay increases associated with internal executive and management positions
- Stopping any travel that is not for critical customer, program, regulatory or supply chain activity
- Eliminating all first and business class air travel, including for executive council
- Suspending nonessential capital expenditures and facilities spending
- Suspending outside consultant spending and temporarily releasing nonessential contractors
- Pausing charitable and other contributions and advertising and marketing expenditures
- Reducing company participation in airshows, tradeshows and special events
- Pausing employee recognition and team event spending
- Stopped catered meal and food services at Boeing facilities, unless customer related
- Cancelling any team off-site meetings. On-site meetings that require travel should be made virtual
"I know these actions will create some uncertainty and concern, as well as many questions," West said.
He went on to say that the company will provide employees with additional guidance in the coming days as to how these cost-cutting measures should be implemented.