Workers with picket signs outside the Boeing Co. manufacturing facility during a strike in Everett, Washington, US, on Friday, Sept. 13, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Boeing announced sweeping cost cuts including a hiring freeze and a pause on nonessential staff travel to preserve cash as it deals with a strike of more than 30,000 factory workers.
Boeing factory workers, mostly in the Seattle area, started walking off the job early Friday after overwhelmingly rejecting a tentative labor deal and to strike.
“We are working in good faith to reach a new contract agreement that reflects their feedback and enables operations to resume,” CFO Brian West said in a staff note on Monday. ” However, our business is in a difficult period. This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future.”
The financial impact of the strike will depend on how long it lasts but Boeing is focused on conserving cash, West said at a Morgan Stanley conference Friday. He said the company’s new CEO, Kelly Ortberg, wants to get back to the bargaining table right away to reach a new deal.
On Friday, Moody’s put all of Boeing’s credit ratings on review for a downgrade and Fitch Ratings said a prolonged strike could put Boeing at risk of a downgrade. That could drive up the borrowing costs of a manufacturer that already has mounting debt.
Boeing burned about $8 billion in the first half of the year as production slowed in the wake of a near-catastrophic door-panel blowout at the start of the year.
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