A labor strike at Boeing showed no signs of ending Friday, as the walkout by 33,000 union machinists entered its eighth day and the company started rolling furloughs of nonunion employees to conserve cash.
Federal mediators joined talks between Boeing and the International Association of Machinists and Aerospace Workers this week, but company and union officials reported that little progress was made during the first two sessions.
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“While we are disappointed the discussions didn’t lead to more progress, we remain very committed to reaching an agreement as soon as possible that recognizes the hard work of our employees and ends the work stoppage in the Pacific Northwest,” Boeing CEO Kelly Ortberg said in a note to employees.
The union said no further talks have been scheduled.
The walkout started Sept. 13, when members of a regional district of the IAM union voted 96% in favor of a strike after they rejected a proposed contract that would have raised their pay by 25% over four years. Workers say they want raises of 40% and a restoration of traditional pension benefits that were eliminated about a decade ago.
Union leaders, who recommended approval of the contract offer, pivoted quickly and surveyed the rank-and-file to learn what they want in a new contract.
The Federal Mediation and Conciliation Service met with both sides Tuesday and Wednesday, but mediation ended without a resolution.
“While we remain open to further discussions, whether directly or through mediation, currently, there are no additional dates scheduled,” IAM District 751 officials said.
The strike mostly involves workers at factories in the Puget Sound area of Washington state, and it will quickly affect Boeing’s balance sheet. The company gets much of its cash when it delivers new planes. The strike has stopped production of 737s, 777s and 767s that Boeing was delivering at a rate of nearly one per day.
Ortberg, who became the aerospace giant's chief executive early last month, announced this week that the company's money-saving steps would include furloughing managers and other nonunion employees.
Terry Muriekes, who has worked at Boeing for 38 years, picketed outside the assembly plant in Everett, Washington, where 777s and 767s are built, and noted the rolling furloughs.
“I’ve never seen Boeing do that before. They might be feeling the pinch, feeling the hurt a little bit, you know — trying to save some money after spending so much money on four CEOs in 10 years that all walked away with multiple golden parachutes,” said Muriekes, who went through four previous Boeing strikes, including the last one, in 2008. ”The company is doing what it has to do, I suppose."
Nearby, Bill Studerus, a 39-year Boeing veteran, carried a “Strike” sign and an American flag.
“When you’re on strike, you have no income, so that is what is challenging for all of us, no matter what age you are,” Studerus said. “My heart tells me that hopefully this this will end soon. I mean, we all want to get back to work and we all want to be the Boeing family that we always have been.”
Boeing's cost-saving moves, which also include a hiring freeze, restrictions on travel, and a 25% salary cut for top executives, will cut across the company's airplane, defense and space, and global-services businesses.
Tens of thousands of nonunion workers will be forced to take one unpaid week off every four weeks under the furlough plan. Ortberg said activities related to safety, quality and customer support would continue, as would production of the 787 Dreamliner, a large plane that is built by nonunion workers in South Carolina.
The Society of Professional Engineering Employees in Aerospace said its board rejected a company request to include the 19,000 Boeing employees it represents in the furloughs. President John Dimas said the union — Boeing's second-biggest after the IAM — saw no compelling reason to alter its contract, which prohibits furloughs.
“To repair its balance sheet, Boeing needs to make striking machinists an offer that would end the current dispute and put them back to work,” Dimas said.
Concern about a cash crunch is prompting ratings agencies to consider downgrading Boeing’s credit to non-investment or junk status, a move that would embarrass Boeing and increase its borrowing costs.
Boeing had $58 billion in debt and $11 billion in cash on June 30, according to a regulatory filing. Chief Financial Officer Brian West said the company burned through $4.3 billion in the second quarter. The company delivered 83 commercial planes in July and August, almost as many as it did in the entire second quarter, but that faster pace will stop if the strike lasts very long.
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Manuel Valdes in Everett, Washington, contributed to this report.