Boeing announced significant cost cuts in response to a strike by over 30,000 factory workers, including a hiring freeze, reduced supplier spending, and a pause on nonessential staff travel. The strike, which started in the Seattle area after rejecting a labor deal, has halted most of Boeing’s aircraft production. The company will make cuts to supplier spending and pause most purchase orders for its 737 Max, 767, and 777 jetliners.
The impact of the strike on Boeing’s finances will depend on its duration, but the company is focused on conserving cash. Boeing’s CFO, Brian West, stated that they are working to reach a new deal with the striking workers while preserving safety, quality, and customer support funding. Temporary furloughs for many employees, managers, and executives may be necessary in the coming weeks.
Moody’s and Fitch Ratings have placed Boeing’s credit ratings under review for a potential downgrade, citing the risk of increased borrowing costs due to the company’s mounting debt. Boeing lost $8 billion in the first half of the year due to production slowdowns following a door-panel blowout incident. The new CEO, Kelly Ortberg, is eager to return to the bargaining table to resolve the strike and resume operations.
Photo credit
www.nbcnews.com
