Boeing Furloughs Staff as Cash-Crippling Strike Continues

KEY TAKEAWAYS

• Boeing CEO Kelly Ortberg told staffers that the airplane maker is temporarily furloughing employees based in the U.S.

• The furlough is aimed at preserving Boeing’s cash, as the strike by machinists continues.

• Ortberg, along with other senior executives, will take a pay cut in a bid to manage the company’s finances amid the disruption.

Boeing (BA) Chief Executive Officer (CEO) Kelly Ortberg told staffers in a memo that the airplane maker is temporarily furloughing U.S.-based employees to preserve cash, as the crippling strike by machinists continues.

Ortberg said both he and his executive team would also take a pay cut in a bid to manage the company’s finances amid the disruption. The furloughs will “impact a large number of U.S.-based executives, managers and employees,” said Ortberg, who has been Boeing’s CEO for just over a month.

A Boeing spokesperson said in an email to Investopedia that tens of thousands of employees will be affected.

CEO Says ‘Difficult Steps To Preserve Cash’ Needed

“With production paused across many key programs in the Pacific Northwest, our business faces substantial challenges and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” Ortberg said.

In a memo to Boeing staff shared with Investopedia earlier this week after members of the International Association of Machinists and Aerospace Workers (IAM) began their strike, Chief Financial Officer (CFO) Brian West said the company would halt most purchase orders for the 737, 767, and 777 aircraft.

Boeing shares were little changed in late-morning trading Thursday but are down 40% this year after a series of mishaps, including a door plug detaching in midair on an Alaska Airlines flight in January.

Read the original article on Investopedia.