Boeing Battles Strike Fallout with Cost-Cutting Drive and Hiring Freeze
1min read Boeing has announced a series of cost-cutting measures, including a hiring freeze and suspension of non-essential travel, as it confronts the challenges posed by a strike involving over 30,000 factory workers. This strike, which has significantly hindered the company’s recovery efforts, has compelled Boeing to prioritize cash preservation.
Boeing's CFO, Brian West, communicated these urgent steps in an employee memo, emphasizing the immediate need for action to protect the company's future. Additional measures include halting promotions-related raises, reducing expenditures on airshows and charitable donations, and sharply cutting supplier spending.
The industrial action began following a resounding 94.6% employee vote against a preliminary four-year contract proposal, which included a 25% wage increase and a commitment to build Boeing's next airplane in the Seattle area. This overwhelming opposition reflects worker dissatisfaction with wage stagnation and rising living costs.
Union leader Jon Holden expressed confidence that the strike could persist as workers seek more substantial wage growth and the restoration of fixed-benefit pension plans, which were lost in previous negotiations. The union and Boeing are set to resume talks under federal mediation this week.
A prolonged strike could further strain Boeing's financial health, already burdened by significant debt. Continued production halts risk impacting both airlines that rely on Boeing aircraft and suppliers involved in component manufacturing.