Boeing said on Wednesday it will temporarily furlough tens of thousands of employees after about 30,000 machinists went on strike on Friday, halting production of its best-selling 737 Max and other aeroplanes.
"We are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees," chief executive Kelly Ortberg said in an email to employees. "We are planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike."
The strike, Boeing's first since 2008, adds to a tumultuous year for the plane maker, which began when a door panel blew off a new 737 Max jet in mid-air in January.
Mr Ortberg also said he and other Boeing leaders "will take a commensurate pay reduction for the duration of the strike".
Boeing and the International Association of Machinists and Aerospace Workers held two days of discussions in the presence of federal mediators. The union, which said on Tuesday it was frustrated with the first day of talks, said late on Wednesday it had concluded another day of mediation with "no meaningful progress".
"While we remain open to further discussions, whether directly or through mediation, currently, there are no additional dates scheduled," the union said. "We are fully committed to fighting for the contract our members deserve."
Boeing did not immediately respond to a request for comment on the IAM statement.
The extensive furloughs show Mr Ortberg is preparing the company to weather a prolonged strike that is not likely to be easily resolved given the anger among rank-and-file workers.
A protracted labour battle could cost Boeing several billion dollars, further straining finances and threatening its credit rating, analysts said.
"It's unlikely that the cuts will fully offset the costs of a prolonged strike," said Ben Tsocanos, aerospace director at S&P Global Ratings.
The union has been pushing for a 40 per cent raise over four years in its first full contract negotiations with Boeing in 16 years, well above the plane maker's offer of 25 per cent, which was resoundingly rejected.
Brian Bryant, the IAM's international president, said actions like furloughs and the cutback in salaries amounted to "smoke and mirrors," given earlier company spending on bonuses and compensation for top executives.
"This is just part of their plan to make it look like they're trying to save money," added Mr Bryant, who was in the Seattle area picketing on Wednesday with the "resilient" membership.
"The ball is in Boeing's court. They could settle this strike tomorrow," Mr Bryant said, adding it would take fair pay, pension, restoring a bonus and health insurance.
In the email to employees, Mr Ortberg said the company would not take any "actions that inhibit our ability to fully recover in the future. All activities critical to our safety, quality, customer support and key certification programmes will be prioritised and continue, including 787 production".
The company employs about 150,000 people in the United States. It is unclear exactly which employees are affected by the furloughs. A union representing Boeing's engineers said their members were not affected.
The ball is in Boeing's court. They could settle this strike tomorrow
Brian Bryant,
international president of the International Association of Machinists and Aerospace Workers
The strike, now six days old, also carries risks for the company's vast network of suppliers, some of whom are also considering furloughs, several told Reuters.
"Certainly suppliers are worried," said Nikki Malcom, chief executive of the Pacific Northwest Aerospace Alliance. "It's going to have a significant impact on suppliers if it goes on a long time."
The strike has halted production of Boeing's 737 Max narrowbody jets, along with its 777 and 767 wide-body aircraft, delaying deliveries to airlines.
A major Chinese lessor, however, said it placed a fresh order on Wednesday for 50 Max jets for delivery from 2028 to 2031, in a sign that longer-term demand for Boeing planes remains intact.
The manufacturer said on Monday it was freezing hiring to cut costs as its balance sheet is already burdened with $60 billion of debt.
The company has also stopped placing most orders for parts for all Boeing jet programmes, except the 787 Dreamliner, in a move that will hurt its suppliers.
One senior supplier dismissed the latest announcement as "panic mode" and said it underscored Boeing's lack of room to manoeuvre due to its already-strained balance sheet.
"They would be better to settle; they are getting very near the precipice," said the supplier, who asked not to be named.
Boeing shares have fallen about 40 per cent so far this year.
It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
Know your Camel lingo
The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home
Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless
Asayel camels - sleek, short-haired hound-like racers
Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s
Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival
UAE currency: the story behind the money in your pockets
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Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
