SEATTLE – Boeing announced it will place approximately 30,000 employees on temporary unpaid leave after a strike halted the production of its 737 Max and other aircraft. CEO Kelly Ortberg informed employees via email, stating, “We are planning one week of leave for every four weeks during the strike.”
This strike marks Boeing’s first since 2008 and comes during a challenging year for the company, which faced issues earlier when a 737 Max door panel detached mid-flight. Ortberg also noted that he and other executives would take pay cuts during the strike.
Boeing and the International Association of Machinists and Aerospace Workers (IAM) held two days of mediation talks. However, the union stated no further discussions are planned, vowing to continue fighting for a fair contract. IAM’s International President, Brian Bryant, criticized the company for imposing unpaid leave and pay cuts while maintaining bonuses and compensation for top executives.
Analysts warn that a prolonged strike could cost Boeing billions and strain its financial structure. Ben Tsocanos, Director of Aerospace at S&P Global Ratings, said that the pay cuts would likely not cover the costs of an extended strike.
The union is demanding a 40% wage increase after four years of negotiations, significantly higher than Boeing’s offer of a 25% raise. The implementation of temporary leave suggests Boeing expects a lengthy strike.
Boeing has halted parts orders for all jet programs except the 787 Dreamliner and is taking measures to minimize harm to suppliers. Boeing shares have dropped about 40% this year.
The strike has suspended production of Boeing’s 737 Max, 777, and 767 models, causing delays in deliveries to airlines.
