BOEING strikers are standing firm despite the announcement last Friday that Boeing will cut 17,000 jobs, 10% of its global workforce, delay first deliveries of its 777X jet by a year and record $5 billion in losses in the third quarter.
CEO Kelly Ortberg said in a message to employees that the significant downsizing is necessary ‘to align with our financial reality’ after the ongoing strike by 33,000 US West Coast workers halted production of its 737 MAX, 767 and 777 jets.
Ortberg’s message said: ‘We reset our workforce levels to align with our financial reality and to a more focused set of priorities.
‘Over the coming months, we are planning to reduce the size of our total workforce by roughly 10%. These reductions will include executives, managers and employees.’
Boeing shares fell 1.1% in after-market trading last Friday.
Ortberg had arrived at the helm of the beleaguered planemaker in August, promising to ‘reset relations’ with the union and its employees.
Boeing recorded falls in pre-tax earnings totalling $5 billion for its defence business and two commercial plane programmes. On September 20, Boeing sacked the head of its troubled space and defence unit Ted Colbert.
In a separate press release, Boeing said it will report third-quarter earnings on October 23 and now expects revenue of $17.8 billion, a loss per share of $9.97, and a better-than-expected negative operating cash flow of $1.3 billion.
Boeing filed an unfair-labour-practice charge with the National Labor Relations Board last Wednesday October 9th accusing the machinists of failing to bargain in good faith.
Ratings agency S&P estimated the strike is costing Boeing $1 billion a month and the company risks losing its prized investment-grade credit rating.
The International Association of Machinists and Aerospace Workers (IAM) said in a statement that Boeing’s announcement regarding the 767 commercial freighter was ‘troubling’ and that it would assess its implications.
IAM also said Boeing’s claims against the union with the National Labor Relations Board are groundless.
The union said both those claims and the discontinuation of the 767 cargo plane seemed intended to distract from the group’s ‘failure to return to the negotiating table with their frontline workers’.
IAM District 751 President Jon Holden said that Boeing’s attempt to bargain in the press ‘won’t work and it is detrimental to the bargaining process’.
He warned that an unwillingness to negotiate would only prolong the strike.
Boeing said in light of the job cuts it would end a furlough programme for salaried employees announced in September.
Meanwhile, IAM Air Transport Territory General Vice President Richie Johnsen was recently in Washington state and Oregon to visit with striking IAM members walking picket lines at the Boeing plants.
Johnsen said: ‘This is currently the largest strike going on in the United States, and IAM members are taking this fight directly to Boeing management.
‘Members are totally united and solidly behind their IAM union negotiations team.’
He told striking members: ‘The IAM Air Transport Territory solidly supports you.
‘You are fighting not just for yourselves, but the entire labour movement.
‘I’m proud of each and every one of you and the IAM Air Transport Territory with its 100,000 members solidly support you.’
33,000 members of IAM District 751 and IAM District W24 voted by 94% to reject Boeing’s contract offer.
The union declared: ‘We want to get back to the negotiating table ASAP to get a contract that this membership accepts and deserves! This is Our Future and Our Fight.
‘IAM District 751 and District W24 represent Boeing workers in Washington state, Oregon and California.
‘Stand with these workers as they hold the line until Boeing offers a deal our members deserve.
‘We must support these workers, as they fight for all working families, the middle class, and all of our communities and families.
‘Show your support by signing this solidarity pledge and spreading the word! We need to raise our collective voice and show Boeing that America’s workforce stands with Boeing workers in this fight.’
Even before the strike began on September 13, the company had been burning cash as it struggled to recover from a January mid-air panel blowout on a new plane that exposed weak safety protocols and spurred US regulators to curb its production.
Boeing faced a court hearing in Texas last Friday in front of a judge who will decide whether to accept the planemaker’s offer to plead guilty to fraud under a deal with the Justice Department.
Boeing has agreed to pay up to a $487.2 million fine, spend at least $455 million on improving safety and face three years of court-supervised probation and independent oversight.
Also last Friday, a national watchdog said the Federal Aviation Administration was ‘not effective’ in overseeing Boeing production.
The plane maker has about $60 billion in debt and posted operating cash flow losses of more than $7 billion for the first half of 2024.
Analysts estimate that Boeing would need to raise between $10 billion and $15 billion to maintain its ratings, which are now one notch above junk.
IAM said on October 1st: ‘In yet another misstep by Boeing executives in the midst of a spirited strike by essential frontline workers at Boeing facilities in Washington, California, and Oregon, Boeing executives made the error today of unceremoniously axing healthcare coverage for 33,000 families, a move that is quickly drawing criticism on many fronts.
‘Workers were informed by USPS notifications to their homes.’
Brian Bryant, IAM International President, issued the following statement: ‘Boeing executives cannot make up their minds. One day they say they want to win back the trust of their workforce.
‘The next moment, on the heels of many recent missteps by their labour relations team, Boeing executives are now tripping over dollars to get pennies by cutting a benefit that is essential to the lives of children and families.
‘But that is nothing compared to the cost of the larger problems Boeing executives have created for their workforce and for the company itself over the last ten years.
‘Their missteps are costing not just the workers but our nation. It’s time for the new CEO to truly engage at the proposal-based level and to take the reins from his subordinates who are fumbling critical decisions like this one.
‘There is no reason the health benefits question could not have been punted on to allow more time for negotiations at the table – it is an unnecessary and cruel decision by Boeing executives that will cost the company much more than it saves them, both short-term and long-term.’
Jon Holden, President of IAM District 751, said: ‘Although this is tough on our members and their families, they have been prepared for this kind of treatment; it’s been a long couple of decades with many threats to their livelihoods and this was an expected action in line with this management team.
‘Over the years, members are often impacted by ill-advised decisions from the C-Suite, yet we stand strong and confident in our efforts to raise the standard for everyone.’
Brandon Bryant, President of IAM District W24, said: ‘Delays by the Boeing Company to have meaningful talks at the bargaining table have resulted in our members being kicked off their health insurance plan.
‘This is unnecessary and could have been avoided by continuing talks to come to an acceptable agreement, instead of walking away from mediation last Friday.
‘Our members continue to be strong in their resolve and will not settle for anything but a fair contract that recognises and rewards the critical and dedicated work they perform.’
In emails to company employees, the Boeing CEO signed off with the phrase ‘Restoring trust.’ Allies of the workers say the ripping away of health benefits from workers and their families runs counter to that goal.
IAM noted: ‘Boeing executives have had multiple failures amidst the strained moment of labour relations for the company, creating unnecessary delays and challenges at the table where workers have vowed they are committed to reach an agreement so long as that agreement acknowledges the decade of sacrifices they made for the company’s benefit under a prior contract that cut health and retirement benefits while providing very limited wage improvements.
‘In other missteps by management that have strained efforts to reach an accord, two weeks ago, Boeing executives went around the established bargaining protocols by sending proposals almost immediately to the media before they could adequately be reviewed by the members’ elected representatives on the negotiating committee.
‘This move was seen as a disrespectful tactic by striking workers, and ratcheted up tensions at the table and on the strike lines. Labour relations experts and others condemned the strange executive tactic as misguided.
‘Now, the move to axe health coverage for workers’ families by Boeing executives is another unforced error by company management who have at times said they want to rebuild trust with the workers who have sacrificed greatly over the recent decade in the face of major corporate bonuses for executives, and squeezing more profit off the backs of their workforce and the supply chain.
‘The union has advocated for mediated or direct talks with the company as a negotiated settlement is the only path to resolving this labour dispute and bringing the 33,000 employees back from strike.
‘The corporation’s health cut actions put workers and their families at risk of catastrophic healthcare costs or denied coverage, in yet another clear misstep as the company claims it is seeking to rebuild trust with its workforce.’