Boeing said on Wednesday that the aircraft maker will temporarily furlough about 100,000 employees. 30,000 machinists went on strike on FridayHalted production of its 737 Max and other aircraft.
“We are initiating a temporary holiday in the coming days, impacting a large number of U.S.-based executives, managers and employees.” CEO Kelly Ortberg The email sent to employees said. “We are planning to provide one week of leave every four weeks to selected employees during the strike period.”
A Boeing spokesman said the layoffs would affect thousands of employees.
Ortberg also said he and other Boeing leaders “would accept pay cuts for the duration of the strike.”
After failing to reach agreement on key issues such as pay and pensions, Boeing and the International Association of Machinists and Aerospace Workers were set to resume contract talks on Wednesday in the presence of federal mediators.
The union is demanding a 40% pay rise over four years in the first full contract talks with Boeing in 16 years, far more than the plane maker's 25% offer that was vehemently rejected.
Analysts say a prolonged strike could cost Boeing billions of dollars in losses, putting further pressure on the aircraft manufacturer's finances and risking a downgrade in its credit rating.
The strike, which entered its sixth day on Wednesday, is Boeing's first since 2008 and the latest incident in a tumultuous year for the plane maker that began with an incident in January. A detached door panel from a new 737 The Max jet in mid-air.
“We will not take any actions that would impede our ability to fully recover in the future,” Ortberg said on Wednesday. “All activities critical to our safety, quality, customer support and key certification programs will be prioritized and continued, including 787 production.”
The strike has halted production of Boeing's best-selling 737 MAX jet, as well as 777 and 767 widebody aircraft, delaying deliveries to airlines.
Boeing said on Monday that ban on recruitment To cut costs, as it already has $60 billion in debt on its balance sheet and a prolonged strike could cause further losses.
The company has also stopped placing most orders for all Boeing jet programs except the 787 Dreamliner, which will hurt its suppliers.
Boeing shares have fallen nearly 40% so far this year. The stock rose 0.3% to $156.86 on Wednesday afternoon.
