Boeing starts furloughs for thousands as strike continues

By Allison Lampert and David Shepardson

WASHINGTON (Reuters) -Boeing said furloughs began on Friday for thousands of employees in Washington State and Oregon, after more than 32,000 workers went on strike last week, halting production of the U.S. planemaker's best-selling 737 MAX and other jets.

Striking workers with the International Association of Machinists and Aerospace Workers received their last paycheck this week, sources said, as talks between Boeing (NYSE:BA ) and its largest union have stalled.

With no signs that negotiators for Boeing and the union would return imminently to the bargaining table, the two sides took early steps to prepare for a lengthy strike.

Boeing CEO Kelly Ortberg told employees on Friday in a message that while the company is disappointed the discussions did not lead to more progress, the planemaker remains "very committed to reaching an agreement as soon as possible."

Ending the strike, which has also shut production of Boeing's 777 and 767 jets, "is a top priority," Ortberg said.

Ortberg told employees this week that the company would initiate temporary furloughs for a large number of U.S.-based employees who are not part of the strike.

Boeing has planned for workers to take one week of furlough every four weeks on a rolling basis for the duration of the strike.

The extensive furloughs show Ortberg is preparing the company to weather a prolonged strike that may not be easily resolved given the anger among rank-and-file workers who want 40% higher pay and a performance bonus restored.

“They are ready to fight this as long as they have to, to get the contract that they deserve,” said Brian Bryant, the IAM's international president, in an interview this week.

Bryant acknowledged that Ortberg, who took over the company in August, is in the difficult position of managing a strike just weeks into the job.



"But we want to see if he’s going to come through and negotiate a contract with us here and get this resolved," Bryant added.

A protracted labor battle could cost Boeing several billion dollars, further straining finances and threatening its credit rating, analysts said.

Source: Investing.com