Boeing to lay off 10% of employees as strike cripples airplane production
SEATTLE - Boeing plans to lay off about 10% of its workers in the coming months as it continues to lose money and tries to deal with a strike that is crippling production of the company’s best-selling airline planes.
New CEO Kelly Ortberg told staff in a memo Friday that the job cuts will include executives, managers and employees.
"We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones on the path to recovery," wrote Ortberg. He later wrote: "Over the coming months, we are planning to reduce the size of our total workforce by roughly 10 percent. These reductions will include executives, managers and employees."
The company had already imposed rolling temporary furloughs, but Ortberg said those will be suspended because of the impending layoffs.
"We know these decisions will cause difficulty for you, your families and our team, and I Sincerely wish we could avoid taking them," wrote Ortberg. "However, the state of our business and our future recovery require tough actions."
The Machinists Union issued a response to X (formerly Twitter) saying Boeing's statements about halting projects and products were "dubious" and "very troubling." The union continued, saying corporate missteps were to blame for a breakdown in negotiations.
"Those corporate missteps have included releasing proposals to the media before they are negotiated; modifying so-called "best and final" offers multiple times before then hastily withdrawing those offers; cutting healthcare coverage for thousands of families and children of their employees; and more."
The company will delay the rollout of a new plane, the 777X, to 2026 instead of 2025. It will also stop building the cargo version of its 767 jet in 2027 after finishing current orders.
Two days of talks this week failed to produce a deal.
After Boeing withdrew their contract offer to striking workers, 30 members of Congress, including Rep. Pramila Jayapal (D-WA), wrote to the aerospace giant urging them to return to the negotiating table.
"We have heard from our constituents that many of the currently striking Boeing workers are experiencing financial distress, and it is deeply concerning that as of October 1, 2024, striking workers have lost their employer-provided health benefits for exercising their right to strike under the NLRA," the congressional letter read. "Members of IAM District 751 and W24 are seeking a 40 percent pay raise and the restoration of a defined-benefit pension. Workers are also seeking a greater say in safety and quality control."
The IAM Machinists Union issued the following responses following Ortberg's memo, saying Boeing executives "stymied good faith efforts" to reach an agreement.
"We appreciate the strong ongoing support we have received from [Jayapal] and other members of Congress. A growing number of elected officials have recognized that given the history of excessive CEO compensation at Boeing, company executives should be able to return to the negotiating table, and do right by their workers who have made incredible sacrifices to keep the company afloat," said Brian Bryant, International President of IAM.
"Today, the company seeded a story to a national media outlet in which they publicly threatened to discontinue their 767 cargo plane, the long-term, multi-year future production of which in no way would be logistically impacted by the four-week current work stoppage. Typically, two to four of those cargo planes are manufactured each month, so the timing of the company claiming they will cancel future years for the cargo plane line over a work stoppage that has been less than one month seems dubious, at best, according to workers," said a spokesperson for the Machinists Union.
Some 33,000 Boeing workers have now reached one month on the picket line. Boeing has lost more than $25 billion since the start of 2019. Union machinists have been on strike since Sept. 14.
The IAM says that "in spite of management's recent blunders," they are committed to reaching an agreement with the company that "acknowledges the decades of sacrifices they made for the company's benefit under a prior contract that cut health and retirement benefits without any significant wage improvements."
The Associated Press contributed to this report.
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