Boeing is reducing executive pay and furloughing nonunion workers during the strike

By CNN Newsource

Published September 18, 2024 10:30 AM

By Chris Isidore and Vanessa Yurkevich, CNN

New York (CNN) — Boeing is temporarily furloughing executives and other nonunion workers to save cash during the strike by 33,000 members of the International Association of Machinists, CEO Kelly Ortberg told employees in an email Wednesday.

The furloughed employees will keep their benefits and they will be off work for one week out of every four on a rolling basis for the duration of the strike in order to limit the impact on each individual, according to the note. But the furloughs “will impact a large number of US-based executives, managers and employees,” the memo said.

But the furloughs, which will start “over the coming days,” will not interrupt production of 787 Dreamliner jets at the company’s nonunion factory in South Carolina, which continues to operate. “All activities critical to our safety, quality, customer support and key certification programs will be prioritized and continue,” said Ortberg.

Ortberg, who started the CEO job on August 8, said he and the company’s leadership team will also take a “commensurate pay reduction for the duration of the strike.”

“We remain committed to resetting our relationship with our represented employees and continuing discussions with the union to reach a new agreement that is good for all of our teammates and our company as soon as possible,” he wrote.

The strike started early Friday morning. Most commercial plane production at the company has been halted. It is the first strike at Boeing in 16 years. The union agreed to concessions in two rounds of bargaining since then, including the loss of traditional pension plans, which an evenly-split membership eventually agreed to for fear that the work on Boeing’s next plane would be shifted to a nonunion factory in another state.

Negotiators for the company, the union and federal mediators resumed talks Tuesday. The union negotiating committee said it didn’t make much progress so far in the discussions.

“We will not mince words – after a full day of mediation, we are frustrated,” the union said in a note to members. “The company was not prepared and was unwilling to address the issues you’ve made clear are essential for ending this strike: Wages and Pension. The company doesn’t seem to be taking mediation seriously.”

A Boeing spokesman did not comment on details of the discussions.

IAM International President Brian Bryant, who was on a picket line outside Boeing’s plant in Auburn, Washington, told CNN in a phone interview that the company’s statement was “smoke and mirrors,” and a poor attempt to shift the blame for the strike, and the furloughs, to the union. He said that cuts in what he termed “exorbitant” executive pay are overdue.

“It’s shameful. Boeing knows what they have to do to settle this strike – recognize the value of the work and the contributions to the company by these employees,” Bryant told CNN. “There’s a strong desire here to correct the wrong of the last 16 years. The workers here have said enough is enough.”

The company has already announced other steps to conserve cash during the strike, including a hiring freeze, cutbacks on travel and reduced purchases from vendors and suppliers.

“While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time,” Ortberg wrote. “We will continue to transparently communicate as this dynamic situation evolves and do all we can to limit this hardship.”