Boeing considers furloughs, other measures amid Machinists strike

EVERETT — Boeing will freeze all hiring, pause any pay increases and consider furloughs for many Boeing employees as a strike by 33,000 members of its Machinists union entered its fourth day, the aerospace giant announced Monday.

On Thursday, nearly 95% of 33,000 members in Everett, Renton and other locations voted to reject a tentative contract that Boeing touted as “historic,” and 96% voted to authorize a strike. The International Association of Machinists and Aerospace Workers District 751 represents about 17,000 workers at the Everett plant.

In response, Boeing Chief Financial Officer Brian West announced a series of cost-cutting moves in a memo to employees Monday.

In addition to the hiring freeze across all levels, Boeing eliminated unnecessary travel, all unnecessary capital expenditures and suspended payments to outside consultants. Steps also include a pause for advertising and marketing as well as charitable contributions.

Boeing is also planning significant reductions in supplier expenses, in a move that could have long-term consequences for production of its 737, 767 and 777 planes.

Boeing reported a $1.4 billion loss in second quarter this year, but expressed optimism in July that the company would reverse course under the leadership of new CEO Kelly Ortberg.

In his memo, West acknowledged the strike, and said the company was committed to reaching a contract agreement that will it to resume normal operations.

“However, our business is in a difficult period,” West said. “This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.”

West added: “I know that these actions will create some uncertainty and concern, as well as many questions.”

West said the company would share more details about furloughs with employees in the “coming weeks.” The furloughs would also include managers and executives.

The federal mediation service said Friday the union and company management would resume contract talks early this week.

The last strike, in 2008, lasted 57 days. Experts estimated it cost Boeing billions of dollars in sales.

Michael Henneke: 425-339-3431; michael.henneke@heraldnet.com; X: @ihenpecked.