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.
BOEING CEO'S CONTROVERSIAL HOME PURCHASE
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
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Boeing shares have lost over 40% this year compared to the S&P 500's 17%+ rise.
Original article source: Boeing's CFO says business 'in difficult position': Read memo to employees