Boeing Strikes and Cost Cutting Measures

Boeing announced significant cost-cutting measures, including a hiring freeze, a pause on non-essential staff travel, and a reduction in supplier spending. These actions were taken in response to the ongoing strike by more than 30,000 factory workers, primarily in the Seattle area, which began on Friday after rejecting a tentative labor deal.

Impact on Aircraft Production

• The strike has halted most of Boeing's aircraft production.
• Boeing will make "significant reductions" in supplier spending and stop most purchase orders for its 737 Max, 767, and 777 jetliners.

Financial Implications

The financial impact of the strike will depend on its duration, but Boeing is focused on conserving cash. The company's new CEO, Kelly Ortberg, aims to get back to the bargaining table promptly to reach a new deal.

• Moody's has put all of Boeing's credit ratings on review for a possible downgrade.
• Fitch Ratings warned that a prolonged strike could put Boeing at risk of a downgrade, potentially increasing its borrowing costs.
• Boeing burned about $8 billion in the first half of the year due to production slowdowns following a near-catastrophic door-panel blowout.

Potential Furloughs and Cost Reductions

In addition to the hiring freeze and travel restrictions, Boeing is considering temporary furloughs for many employees, managers, and executives in the coming weeks to further reduce costs.

Supplier Impact

The strike and subsequent cost-cutting measures will have a significant impact on Boeing's suppliers, who rely heavily on the company's work.

Negotiations and Resolution

Boeing's CFO, Brian West, stated that the new CEO, Kelly Ortberg, wants to get back to the bargaining table right away to reach a new deal with the striking workers and resume normal operations.