Boeing said it is freezing hiring and weighing temporary furloughs in the coming weeks to manage costs as a strike by more than 30,000 Boeing workers who build planes in factories on the US West Coast stretched into its fourth day on Monday.
The company added that the strike would also affect spending on its supply chain, as it would stop issuing the majority of supplier purchase orders for the 737, 767 and 777 programmes affected by the stoppage, chief financial officer Brian West told employees.
“I know that these actions will create some uncertainty and concern,” Mr West wrote in a letter shared on Monday.
“This strike jeopardises our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.”
Boeing's actions to protect cash come as company and union negotiators are due to resume talks over a labour contract on Tuesday. Rating agencies have warned that the work stoppage could adversely affect the plane maker's recovery with a lengthy strike set to strain Boeing's already fragile finances.
Even before its factory workers downed tools, Boeing was struggling with a safety and production crisis caused by a door panel detaching from a near-new 737 Max plane in mid-air in January and is saddled with $60 billion of debt.
“We believe an extended strike would be costly and difficult to absorb, given the company's already strained financial position,” said S&P Global Ratings in a note on Monday.
“A shorter strike, on the order of weeks, would likely be manageable for Boeing and not lead to a negative rating action.”
The International Association of Machinists and Aerospace Workers, Boeing's largest union, last week overwhelmingly voted down a contract which included a 25 per cent pay increase spread over four years, but removed an annual performance bonus.
S&P said the strike does not immediately affect its issuer credit rating or negative outlook on the company.
Union leaders will meet federal mediators and Boeing to restart labour negotiations on Tuesday, the IAM said in a post on X on Saturday.
Jon Holden, the lead union negotiator, said on Saturday that workers wanted Boeing to increase its wage offer and reinstate a defined-benefit pension that was taken away a decade ago in return for keeping plane production in Washington state.
Two union sources told Reuters they did not expect Boeing to restore the old pension, but that demand could be used to negotiate bigger company pension contributions and higher pay.
Union members on the picket lines outside Boeing factories around Seattle were optimistic about their chances of getting a better deal out of Boeing, but few expect it to happen quickly.
This is the eighth strike since the IAM's Boeing arm was established in the 1930s. The last two, in 2008 and 2005, lasted 57 days and 28 days, respectively.
