Boeing cuts executive pay and furloughs non-union workers during strike

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

The furloughed employees will retain their benefits and be released from work every fourth week for the duration of the strike to limit the impact on each individual, the memo said. However, the furloughs “will impact a large number of executives, managers and employees across the United States,” the memo said.

But the furlough, which will begin “in the next few days,” will not interrupt 787 Dreamliner production at the company's non-union factory in South Carolina, which remains operational. “All activities critical to our safety, quality, customer care and important certification programs will be prioritized and continued,” Ortberg said.

Ortberg, who took over as CEO on August 8, said he and the company's leadership team would also accept “a corresponding salary reduction for the duration of the strike.”

“We remain committed to resetting our relationships with the workers we represent and continuing discussions with the union to reach a new agreement as quickly as possible that is beneficial to all of our teammates and our company,” he wrote.

The strike began early Friday morning, largely halting production of commercial aircraft. It is the first strike at Boeing in 16 years. In two rounds of negotiations since then, the union has made concessions, including the loss of traditional pension plans. Fearing that work on Boeing's next plane would be moved to a non-union factory in another state, an evenly split membership finally agreed.

Negotiators from the company, the union and the federal mediator resumed talks on Tuesday. The union's negotiating committee said that no major progress had been made in the talks so far.

“We are not going to mince our words – after a full day of mediation, we are frustrated,” the union said in a message to members. “The company has been unwilling and unprepared to address the issues that, as you have clearly stated, are critical to ending this strike: wages and pensions. The company does not appear to be taking mediation seriously.”

A Boeing spokesman declined to comment on the details of the talks.

Brian Bryant, president of IAM International, who was striking outside Boeing's Auburn, Washington, plant, said in a phone interview with CNN that the company's statement was “sham” and a weak attempt to shift blame for the strike and furloughs onto the union. He said cuts to executives' “exorbitant” salaries are long overdue.

“It's disgraceful. Boeing knows what they have to do to end this strike – they have to recognize the value of the work and the contributions of these employees to the company,” Bryant told CNN. “There is a strong desire here to right the wrongs of the last 16 years. The workers here have said enough is enough.”

The company has already announced further measures to save money during the strike, including a hiring freeze, cuts in travel and reduced purchases from dealers and suppliers.

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