Boeing has announced a series of cost-cutting measures in response to an ongoing strike that has seen 30,000 unionized machinists walk off the job, effectively halting production of the company's 737 MAX and other airplanes. As a result, the aerospace giant will temporarily furlough a large number of employees, including tens of thousands of US-based executives, managers, and other staff, while also implementing pay reductions for its leadership team.

The strike, led by the International Association of Machinists and Aerospace Workers (IAM), began after union members overwhelmingly rejected a contract offer from Boeing that included a 25% wage increase over four years. The union is demanding a 40% raise over the same period, citing stagnant wages amidst growing consumer inflation and the elimination of their annual bonus and pensions as primary concerns. Workers have been picketing around the clock at Boeing’s Seattle-area plants, which assemble key aircraft models like the 737 MAX and 777.

Boeing's CEO, Kelly Ortberg, stated that the furloughs would require selected employees to take one week off every four weeks on a rolling basis for the duration of the strike. Ortberg assured that activities critical to safety, quality, customer support, and key certification programs would continue, including the production of the 787 Dreamliner, which is manufactured at a non-union facility in South Carolina. Ortberg, who has been in his role for just under six weeks, emphasized the tough nature of this decision, but asserted it was necessary for preserving the company’s long-term future.

The financial ramifications of the strike could be severe, with analysts warning that a prolonged disruption could cost Boeing several billion dollars and potentially lead to a downgrade of its credit rating. The company's balance sheet is already burdened with $60 billion of debt, and Boeing has taken additional measures such as freezing hiring, halting most parts orders for all jet programs except the 787, and letting non-essential contractors go temporarily.

Despite the striking workers picketing day and night, negotiations between Boeing and the IAM resumed with federal mediators. However, union representatives have expressed frustration, accusing Boeing of not taking the mediation process seriously and being unprepared to address the critical issues of wages and pensions necessary to end the strike.

The union, in one of its statements, urged Boeing to present a fair contract that could resolve the labor dispute, allowing workers to return to building and delivering aircraft. Boeing shares have seen a roughly 40% decline so far this year, reflecting the company’s ongoing struggles in a tumultuous year marked by multiple crises, including a near-catastrophic incident involving a new 737 MAX jet in January. While the strike continues to impact Boeing's operations significantly, both the company and union remain engaged in negotiations, hoping to reach a resolution that addresses the workers' concerns and stabilizes Boeing's operations and financial health.