Boeing strike is a big blow, but it has bigger challenges to face: Peter McNally
Third Bridge global head of analysts Peter McNally discusses how the Boeing factory workers strike is impacting business on 'The Big Money Show.'
Boeing said it is issuing layoff notices to employees who are included in the aerospace giant's broader workforce reduction plan.
The approximately 17,000 employees included in the cuts were notified this week and are expected to leave the company in mid-January, Boeing said. The cuts, which come after the labor union strike, equate to 10% of its workforce.
"We are adjusting our workforce levels to align with our financial reality and a more focused set of priorities," Boeing said in a statement to Gxstocks.
CEO Kelly Ortberg, who took over in August, told staff in a memo last month that the job cuts would include executives, managers and employees.
Boeing CEO Kelly Ortberg took over the aerospace company in August. (Daniel Acker/Bloomberg via Getty Images/File)
"Our business is in a difficult position, and it is hard to overstate the challenges we face together," Ortberg told staff, saying that the situation "requires tough decisions, and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term."
The company has about 170,000 employees worldwide, many of them working in manufacturing facilities in South Carolina and Washington state.
CEO OF BOEING CLOSES ON $4.1M SEATTLE HOME AMID FACTORY WORKERS' STRIKE: 'THEY CAN PAY US, TOO'
(Giuseppe Cacace/AFP via Getty Images/File)
The company also announced the end of production of its 767 aircraft in 2027 after it completes the current orders for 29 jets.
BOEING WORKERS VOTE TO STRIKE AFTER CONTRACT NEGOTIATIONS REJECTED BY MEMBERS
They also delayed the rollout of its new 777X to 2026, instead of 2025. The delay comes after the recent discovery of a defective part that grounded test flights earlier this year.
Boeing workers in Seattle voted to strike on Sept. 12, rejecting a contract the embattled aviation giant characterized as a boon for staff given the company's stressed financial condition. (Jason Redmond/AFP via Getty Images/File)
The aerospace company faced a strike involving 33,000 workers in the Seattle area. The strike shut down production of the 737 Max, Boeing’s best-selling plane, and 777s and 767s. The strike was prompted after workers overwhelmingly refused tentative contract negotiations provided by the company.
The Max is a key revenue generator for the company, which raised more than $24 billion in late October to shore up its shaky finances and protect its investment grade rating following concerns from rating agencies.
Boeing has lurched from crisis to crisis this year, kicking off on Jan. 5 when a door panel blew off a 737 Max jet in midair. Since then, its CEO departed, its production has slowed as regulators investigated its safety culture, and its largest union kicked off the strike on Sept. 13.
The strike's end on Nov. 5 and the return of Boeing's workers to the company's Seattle-area assembly lines this week now support a slow revival of Max production.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | THE BOEING CO. | 139.93 | -5.27 | -3.63% |
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Gxstocks' Jasmine Baehr and Reuters contributed to this report.
