By SEATTLE – Boeing Co. has implemented a hiring freeze and is considering temporary furloughs to cut costs as a strike by more than 30,000 workers entered its fourth day on Monday, threatening to derail the aerospace giant’s recovery efforts.
The planemaker’s decision comes as union leadership and company executives prepare to resume talks on Tuesday, following a misjudgment of worker sentiment that led to a strike supported by 96% of union members. The work stoppage has halted production of Boeing’s crucial 737 series just as the company was attempting to accelerate assembly lines.
“This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future,” Boeing Chief Financial Officer Brian West wrote in a letter to employees on Monday. The company will cease issuing the majority of supplier purchase orders for the 737, 767, and 777 programs affected by the stoppage.
The rare decision to halt most parts orders for all Boeing jetliner programs except the 787 Dreamliner is expected to send shockwaves through an industry still struggling to rebuild after the COVID-19 pandemic. Industry executives warn of potential layoffs at smaller suppliers unable to weather the financial strain, potentially creating a cycle of worker departures just as the sector faces competition from other industries for skilled labor.
Boeing’s financial position was already strained before the strike, with the company grappling with a safety and production crisis following a door panel incident on a 737 MAX in January. The planemaker is also burdened with $60 billion in debt.
S&P Global Ratings noted that while a shorter strike lasting weeks might be manageable, “an extended strike would be costly and difficult to absorb, given the company’s already strained financial position.”
The International Association of Machinists and Aerospace Workers (IAM) rejected Boeing’s offer of a 25% pay increase over four years, which also removed an annual performance bonus. The union initially sought a 40% wage hike and is pushing for the reinstatement of a defined-benefit pension that was eliminated a decade ago.
Union members on picket lines outside Boeing factories near Seattle expressed determination to secure a better deal, though few expect a quick resolution. “I can go for six weeks, eight weeks, but it’s up to Boeing management to decide when they want to offer a fair deal,” said Thinh Tan, an engineer at the 737 MAX factory.
The strike, the eighth since the IAM’s Boeing unit was established in the 1930s, has brought to the fore long-simmering worker frustrations over lagging wages and executive compensation. “I live paycheck to paycheck,” said Chris Ginn, a 777 jet factory worker, echoing sentiments shared by many of his colleagues.
As both sides prepare to return to the negotiating table, the outcome of these talks could have far-reaching implications for Boeing’s production capabilities, its financial stability, and the broader aerospace industry supply chain.
