Boeing to repay furloughed staff, proceed with job cuts

By David Shepardson

WASHINGTON (Reuters) -Boeing CEO Kelly Ortberg said on Thursday that employees furloughed during a seven-week strike by factory workers would be repaid by the company for lost wages, but it would proceed with plans to cut about 10% of its global workforce.

Boeing (NYSE:BA ) furloughed thousands of salaried employees on a rolling basis after the strike by 33,000 union machinists began in September and halted production of its best-selling 737 MAX. But the planemaker later canceled the unpaid leave after announcing plans to cut 17,000 jobs.

"Your sacrifice made a difference and helped the company bridge to this moment," Ortberg told staff in an email seen by Reuters. "We want to acknowledge your support by returning your lost pay if you went on unpaid furlough."

Boeing is dealing with morale issues as it moves ahead with its job cuts, with many of the employees due to be notified about the future of their roles this month.

"We will continue forward with our previously announced actions to reduce our workforce levels to align with our financial reality and a more focused and streamlined set of priorities," Ortberg wrote to staff. "These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term."

A spokesperson for the Society of Professional Engineering Employees in Aerospace, which represents Boeing engineers, said earlier it was informed that 60-day notices of job losses would be issued to its members on Nov. 15.

Boeing on Monday (NASDAQ:MNDY ) won ratification of a contract giving its machinists a 38% pay hike over four years and a $12,000 bonus, ending the strike.

Those workers are due back by Nov. 12. Boeing has not said yet when it plans to resume production of the 737 MAX, but has indicated it will be gradual and under regulatory scrutiny.

The planemaker has racked up losses of nearly $8 billion this year as it continues to wrestle with a quality crisis from a January mid-air panel blowout.

"We have hard work ahead to restore our company and deliver on our customer commitments, but we are on the right path and making the right changes," Ortberg wrote.

Boeing raised $24 billion in fresh capital last month to shore up its finances. Ortberg said last month he is reviewing Boeing's businesses and long-term forecasts.



The company may end up selling some assets, as it downsizes its workforce to focus on the company's key civil planemaking and core defense units.

Ortberg's email was reported earlier by the Air Current, an aviation industry publication.

Source: Investing.com