Boeing implements a hiring freeze and curbs executives' luxury travel perks amidst an extended work stoppage.
The top brass at Boeing, led by CFO Brian West, declared a hiring halt and suspension of non-essential journeys on Monday. They're even looking into temporary layoffs for employees, managers, and high-ups.
The company's putting the brakes on first-class and business travel, even for Boeing executives – although they didn't touch upon whether the elite will still be using their corporate jets privately.
West's message was a direct reaction to the ongoing dispute with the International Association of Machinists and Aerospace Workers union. Last Friday, 33,000 union members, following a 95% vote against the deal struck between union leadership and Boeing, went on strike. An extra 4% voted in favor of shutting down operations at one of America's largest manufacturers and exporters.
"This strike poses a major threat to our recovery and we need to undertake necessary steps to conserve cash and safeguard our common future," West stated in the memo.
Boeing is also scaling back their charitable donations, stopping meals at their facilities, and halting appearances at trade shows and functions. As part of the hiring freeze, Boeing is temporarily pausing salary hikes for promotions. Even though negotiations between the union and the company are set to resume this week with a mediator from the federal government.
Boeing is also mulling over trimming its spending with some of its 10,000 suppliers, according to West's memo.
"We'll halt most purchase orders for the 737, 767, and 777 programs from being issued to our suppliers," he wrote.
Boeing's financial situation is far from robust and they've losed $33 billion since 2019. On Friday, credit rating agencies Fitch and Moody's hinted at the possibility of downgrading Boeing's credit rating to junk bond status.
The hiring halt and suspension of non-essential journeys extend to business-related travels as well. Due to the financial strain, Boeing is considering reducing its spending with some of its 10,000 suppliers.
