Boeing Implements Stringent Cost-Cutting Amid Major Strike
Image courtesy of : AFP (JUSTIN TALLIS)
Amid a significant strike, Boeing has announced extensive cost-cutting measures, including a hiring freeze, unpaid employee furloughs, and suspension of some salary increases. CFO Brian West stated the company is in a 'difficult phase,' with the strike severely hindering recovery efforts. Boeing has also canceled non-essential business travel, restricted remaining travel to economy class, and frozen expenditures on advertising, marketing, and charitable activities.
The strike, involving over 30,000 workers, has halted production of key aircraft models, including the 737 MAX and 777. This disruption is costing Boeing an estimated $100 million daily and jeopardizing its credit rating. The company already faced financial challenges, with a net loss of $1.4 billion reported in Q2 2024 and increased scrutiny from regulatory bodies following a recent emergency landing incident involving a 737 MAX.
Both Boeing and the union plan to resume negotiations with federal mediators in an effort to reach an agreement. The last major strike at Boeing in 2008 lasted 57 days, and there is concern that the current strike could extend for weeks, further straining the company's financial stability.
