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Boeing is looking to slash costs as a machinists’ strike continues, with staff members possibly to be stood down.
Industrial action is underway from around 33,000 members of the International Association of Machinists and Aerospace Workers at several locations in Washington state, Oregon, and California, in yet another headache for the embattled planemaker.
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Workers are seeking a pay rise of at least 40 per cent, having knocked back an offer of 25 per cent over four years.
The news comes amid a sea of troubles for Boeing, including supply chain issues and continued knock-on effects from January’s Alaska Airlines incident, which affected fleet renewal programs at airlines such as Virgin Australia.
“We are working in good faith to reach a new contract agreement that reflects their feedback and enables operations to resume,” Boeing CFO Brian West said in a company-wide memo.
“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. Importantly, we will protect all funding for safety, quality, and direct customer support work.”
The austerity measures laid out in West’s memo include a hiring freeze “across all levels”; stopping non-critical travel and eliminating first and business class travel, including for management and executives; suspending “non-essential capital expenditures and facilities spending”; ending non-customer-related catering at Boeing facilities; and reducing airshow, trade show, and special event participation.
“In parallel to the steps above, we are planning to make significant reductions in supplier expenditures and will stop issuing the majority of supplier purchase orders on the 737, 767, and 777 programs,” West said.
“We are also considering the difficult step of temporary furloughs for many employees, managers, and executives in the coming weeks.”
Virgin Australia last week switched 12 of its 737 MAX 10 orders to MAX 8s in the hope of receiving planes sooner, bringing its total MAX 8 order to 26.
In March, Australian Aviation reported how Virgin was staring down potential late arrivals of 31 new 737 MAX aircraft, including all 25 of its MAX 10s, owing to increased production delays across all Boeing aircraft types. The MAX 10s have yet to be certified and are not expected to arrive until 2026 at the earliest.
Its first MAX 8 arrived last year after being delayed by problems at Boeing supplier Spirit AeroSystems, forcing the airline to initially use 737-700s on its Cairns–Tokyo (Haneda) route instead of MAX 8s as it had planned.
Despite the issues, the carrier increased its 737 MAX 8 order from eight to 14 in November. As the planes arrive, Virgin plans to deploy them on domestic routes servicing Brisbane, Sydney, Melbourne, Perth, Adelaide and Cairns, and overseas destinations such as Fiji, Bali and Samoa.
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says:With Boeing staff struggling to build aircraft without defects, having prolonged delays in getting new designs into production and Airbus sales streaking ahead, this industrial action is unbelievable. A 40% pay rise for leaving tools and debris inside aircraft structures, defective assembly – is this union for real? It’s as if Airbus was employing these people to drive Boeing into the ground. I think they may soon be headed to the unemployment line.