Boeing has announced cost-cutting measures in response to a strike by over 30,000 factory workers in the Seattle area. The company has implemented a hiring freeze, halted nonessential staff travel, and reduced supplier spending to preserve cash. This includes stopping most purchase orders for its 737 Max, 767, and 777 jetliners. The strike has led to a halt in most of Boeing’s aircraft production.
The financial impact of the strike will depend on its duration, but Boeing is focused on conserving cash during this difficult period. The company’s CFO, Brian West, stated that they are working in good faith to reach a new contract agreement that reflects worker feedback and enables operations to resume. Boeing is also considering temporary furloughs for many employees, managers, and executives in the coming weeks.
Moody’s has placed all of Boeing’s credit ratings on review for a downgrade, while Fitch Ratings warns that a prolonged strike could further jeopardize Boeing’s financial position and potentially lead to a downgrade. This could increase borrowing costs for the company, which has already faced challenges due to mounting debt and financial losses earlier in the year. Boeing’s new CEO, Kelly Ortberg, is eager to get back to the bargaining table to reach a new deal and mitigate the impact of the strike on the company’s future.
Photo credit
www.nbcnews.com
