Commercial aircraft manufacturer Boeing Co. (BA) has furloughed tens of thousands of employees as a strike by 30,000 machinists drags on and halts the company’s production.
Work on Boeing’s 737 MAX, and other aircraft, has been stopped, leading the company to layoff thousands of workers that it says aren’t currently needed.
In a staff memo that’s been made public, Boeing chief executive officer (CEO) Kelly Ortberg said: “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.”
Boeing has 150,000 employees in the U.S. and it’s not clear how many or which employees are impacted by the furloughs.
The machinists’ strike is the first work stoppage at Boeing since 2008 and adds to an already difficult year for the company, which has been struggling with safety issues after a door panel blew off a new 737 MAX aircraft midflight in January.
The International Association of Machinists and Aerospace Workers, the union representing the machinists, is calling for pay raises of up to 40% as part of a new collective agreement.
Boeing has reportedly offered a 25% pay increase and enhancements to its healthcare and retirement benefits.
Many workers are angry at Boeing for moving production of some commercial aircraft to non-unionized locations, and for eliminating the company’s traditional defined benefit pension plan.
Analysts say that the extensive furlough indicates that Boeing is bracing for a prolonged strike that is not likely to be resolved in the near-term.
The strike is expected to cost Boeing billions of dollars in losses and further strain the company’s finances. Boeing currently has about $60 billion U.S. of debt.
The stock of Boeing is down nearly 40% this year and currently trading at $155.11 U.S. per share.