Boeing memo to employees announces necessary actions to preserve cash and safeguard shared future

Published September 16, 2024 1:55pm EDT

Boeing shares have lost over 40% this year

Boeing shares slipped on Monday as the planemaker grapples with an ongoing strike and a ballooning threat to its bottom line. Chief Financial Officer Brain West, in a letter to employees, outlined the risks facing the company while also announcing a hiring freeze as well as a delay in pay hikes for salaried workers.

Read his memo to Boeing's rank and file below.

Memo to Boeing Employees

Team,

As you know, our IAM 751 and W24 represented employees in the Pacific Northwest are on strike. We are working in good faith to reach a new contract agreement that reflects their feedback and enables operations to resume. However, our business is in a difficult period. This strike jeopardizes our recovery in a significant way and we must take necessary actions to preserve cash and safeguard our shared future. Importantly, we will protect all funding for safety, quality and direct customer support work.

Actions include:

Instituting a hiring freeze across Boeing for all levels, and pausing on any pay increases associated with internal executive and management promotions

Stopping any travel that is not for critical customer, program, regulatory or supply chain activity

Eliminating all first and business class air travel, including for the Executive Council

Suspending non-essential capital expenditures and facilities spending

Suspending outside consultant spend and temporarily releasing non-essential contractors

Pausing charitable and other contributions, and advertising and marketing expenditures

Reducing company participation in airshows, tradeshows and special events

Pausing employee recognition and team event spending

Stopping catered meal and food services at Boeing facilities unless customer related

Cancelling any team off-site meetings. On-site meetings that require travel should be made virtual.

In parallel to the steps above, we are planning to make significant reductions in supplier expenditures and will stop issuing the majority of supplier purchase orders on the 737, 767 and 777 programs. We are also considering the difficult step of temporary furloughs for many employees, managers and executives in the coming weeks.

I know that these actions will create some uncertainty and concern, as well as many questions. We’ll be sharing additional information in the coming days as we have detailed guidance on implementation of these measures.

Brian

https://www.foxbusiness.com/markets/boeings-cfo-says-business-in-difficult-position-read-memo-employees