Dive Brief:
- Boeing is freezing hiring company-wide as union workers continue their strike, CFO and EVP Brian West said in a memo to employees Monday.
- The freeze is a move to preserve cash as Boeing contends with the International Association of Machinists and Aerospace Workers’ strike that began Sept. 13, impacting production, deliveries and operations, West said at a Morgan Stanley conference Friday.
- “This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future,” West said in the memo. “Importantly, we will protect all funding for safety, quality and direct customer support work.”
Dive Insight:
As part of the cost-saving plan, Boeing is also making “significant reductions” in supplier spending and stopping the majority of supplier purchase orders on the 737, 767 and 777 aircraft programs. The company is considering temporary furloughs for employees at all levels in the coming weeks.
In other moves, Boeing will pause pay increases associated with promotions and halt spending on non-essential capital expenditures, facilities and outside consultants. Boeing also laid off dozens of engineering contractors, The Seattle Times reported Monday.
The aircraft maker will share more information in the coming days, West said in the memo.
The strike is a blow to Boeing, at a time when it was making strides in scaling capacity of the 737 Max to 38 units a month, West said in his remarks Friday. The plane maker aimed to gradually ramp up its 737 Max production and manufactured 25 aircraft units in June and July.
Production recovery is now dependent on the duration of the strike.
The Federal Mediation and Conciliation Service announced Friday that it is convening Boeing and IAM to continue contract talks. The two parties will resume negotiations on Tuesday, according to District 751.
“Our intent is to get back to table and try to get an agreement,” West said at the conference.