Today’s News
Boeing CEO Kelly Ortberg announced on Thursday that the company will compensate employees furloughed during the recent seven-week strike by factory workers for lost wages. However, Boeing will proceed with its plan to reduce about 10% of its global workforce, despite the move to support its staff.
Image Source: Bloomberg
The strike, which began in September and involved 33,000 union machinists, halted production of the company’s flagship 737 MAX, prompting Boeing to furlough thousands of salaried employees. Plans for unpaid leave were canceled after the company revealed intentions to eliminate 17,000 positions.
In an email to staff seen by Reuters, Ortberg acknowledged the sacrifices made by furloughed employees, stating, “Your sacrifice made a difference and helped the company bridge to this moment. We want to acknowledge your support by returning your lost pay if you went on unpaid furlough.”
Despite compensating furloughed employees, Boeing is pushing ahead with job cuts, impacting staff morale as employees wait to learn their future with the company. Ortberg emphasized in the email that the workforce reduction is necessary to align with Boeing’s financial goals and streamline priorities: “These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term.”
The Society of Professional Engineering Employees in Aerospace, which represents Boeing engineers, has confirmed that members will receive 60-day layoff notices starting on November 15.
The strike officially ended on Monday, with machinists ratifying a contract that includes a 38% pay increase over four years and a USD 12,000 bonus. The workers are expected to return on November 12. Although Boeing has not set a specific date to resume 737 MAX production, it has stated the restart will be gradual and monitored by regulators.
The company has struggled this year, reporting nearly USD 8 billion in losses due to quality issues from a mid-air panel incident in January. In his email, Ortberg expressed optimism about the company’s progress, writing, “We have hard work ahead to restore our company and deliver on our customer commitments, but we are on the right path and making the right changes.”
Boeing recently raised USD 24 billion in capital to stabilize its finances, and Ortberg has hinted at a review of Boeing’s long-term strategy, which may include asset sales as the company refocuses on its core civil aviation and defense divisions.
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