Boeing Will Furlough Non-Union Employees As Strike Continues

Topline

Boeing will furlough its executives, managers and other white-collar employees one week of every four for the duration of a strike that union employees voted to authorize last week amid negotiations over pay and pension.

Key Facts

The company on Wednesday said the furloughs “will impact a large number of US-based executives, managers and employees" but did not specify exactly how many, promising only that "safety, quality, customer support and key certification programs will be prioritized and continue, including 787 production."

The furloughs join other cost-saving efforts that have been announced since the strike began, including a hiring freeze and reduced purchases from vendors and suppliers.

The strike has stopped most commercial plane production at the company and talks between the union and the company have resumed.

About 33,000 Boeing factory workers represented by Districts 751 and W24 of the International Association of Machinists and Aerospace Workers union (IAM) announced on September 12 its members had voted 94.6% to reject a contract offer from the company and 96% for a strike.

Holden, who had previously urged the workers to accept Boeing’s offer, said the union’s leadership is prepared to get back to the negotiating table with the company and “try to resolve the issues and address what the members needs are.”

Forbes has reached out to Boeing for comment.

Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.

Key Background

Union members and Boeing have been at odds over wages and pensions. Earlier this month, it appeared the company had reached a tentative agreement with the unions by offering a 25% raise over four years and lower healthcare costs, as well as promises to build its next new plane in Washington state’s Puget Sound area. In a statement, Stephanie Pope, the chief of Boeing’s commercial airplanes division, called the contract “historic” and said it provides “the largest-ever general wage increase, lower medical cost share to make healthcare more affordable, greater company contributions toward your retirement, and improvements for a better work-life balance.” On Monday, Holden recommended the union’s members accept the deal, but by Friday the union instead voted to walk off the job. “The response from people is it’s not good enough,” Holden told the Seattle Times.

Tangent

The strike comes as Boeing is facing elevated scrutiny over the safety of its passenger planes and other crises, including issues with its Starliner spacecraft. Boeing’s 737 MAX planes were involved in two fatal crashes in 2018 and 2019, which led to their grounding for over a year and a half. Earlier this year, the safety of the 737 MAX came under the spotlight again after a door plug blew off an Alaskan Airlines flight minutes after take off. In July, Boeing agreed to plead guilty to a fraud conspiracy charge in a deal with the Justice Department in a federal case linked to the two 737 Max crashes. The company is still facing a separate criminal probe over the Alaska Airlines incident. The company’s first spacecraft, the Starliner, also ran into problems on its first crewed mission last month. After carrying NASA astronauts Sunita Williams and Barry “Butch” Wilmore to the International Space Station, the Starliner was forced to return to earth without them due to safety concerns.

Further Reading

Boeing Reaches Major Labor Deal—Averting Costly Strike Amid Rough Year (Forbes)