The recent strike
of more than 30,000 workers at 
Boeing
has seemingly impacted the company’s finances in a significant manner. Its Chief Financial Officer (CFO), Brian West, announced that the planemaker will be imposing cash-conserving measures such as a hiring freeze and furloughs.
It comes as
Boeing and the International Association of Machinists and Aerospace Workers (IAM), the union representing the workers on strike, are set to resume negotiations over a new and improved contract this week
. The manufacturer previously indicated that it was aware that its original contract was not pleasing to the workers before they went on strike.
A slew of initiatives
Boeing is in the midst of a “difficult period,” according to West, who sent a memo to employees on Monday.
“As you know, our IAM 751 and W24 represented employees in the Pacific Northwest are on strike. We are working in good faith to reach a new contract agreement that reflects their feedback and enables operations to resume. However, our business is in a difficult period. This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future. Importantly, we will protect all funding for safety, quality, and direct customer support work.”
Photo: Boeing
As such, Boeing will pause hiring across all levels for an undisclosed amount of time. The company will also freeze any pay increases related to promotions of internal executive and management employees. Travel that is non-essential for its customers, aircraft programs, regulatory processes, or supply chain activities will be stopped. However, all employees, including Executive Council members, traveling essentially will no longer be able to fly in first or business class.
Non-critical capital expenditures and spending on facilities will be suspended, while outside consultant spending will be halted, and non-essential contractors will be temporarily released. West also confirmed that contributions to charities and other goodwill, advertising, and marketing expenditures will be paused.
Appearances, catering, & supplier expenditures
Other cost-cutting initiatives include minimizing appearances at airshows, tradeshows, and other special events. Recognizing employees’ contributions and other team event spending will be paused. Additionally, catered meals and food services at Boeing facilities will be stopped unless they are related to its customers. All meetings held off-site will be canceled, and any on-site meetings that require travel will be conducted virtually.
Photo: Tom Boon | Simple Flying
Boeing will also be making changes to its supplier expenditures. The planemaker will discontinue issuing the majority of supplier purchase orders on the 737, 767, and 777 programs, according to West.
“We are also considering the difficult step of temporary furloughs for many employees, managers, and executives in the coming weeks,” the CFO said.
“Some uncertainty and concern”
The move is another blow to Boeing, which has been reeling from scrutiny over production flaws involving its 737 MAX
aircraft – one of the planes built by the IAM union members. Since the deadly crashes in 2018 and 2019 involving the MAX 8 and this year’s door plug debacle involving the MAX 9 variant, the company has struggled to maintain a respected reputation.
“I know that these actions will create some uncertainty and concern, as well as many questions,” West said to employees. “We’ll be sharing additional information in the coming days as we have detailed guidance on the implementation of these measures.”