Written by by Dominic Gates at seattletimes.com
Boeing on Monday announced internally a series of sweeping cost-cutting moves in response to the Machinists strike, and said it may temporarily lay off some employees, including managers and executives.
According to three sources, Boeing laid off dozens of engineering contractors, mostly experienced retirees who had returned to help Boeing fix problems on airplanes under development.
The cost-cutting measures also include significant holds on taking aircraft parts from suppliers, an action that will ripple through the smaller aerospace firms around the region.
In a message to employees, Chief Financial Officer Brian West said that Boeing is “considering the difficult step of temporary furloughs for many employees, managers and executives in the coming weeks.”
Boeing is also “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,” West said.
By the end of last quarter, drastically lowered production rates this year had raised Boeing’s accumulated net debt to $45 billion. Of that, $12 billion is due to be repaid within two years.
In the first half of this year, Boeing saw a cash outflow of more than $8 billion.
And because of the strike, Boeing’s credit rating is under review for possible downgrade to “junk” status, which would sharply raise the cost of further borrowing.
The note to employees provided no detail on either the supplier cuts or the temporary layoffs.
An experienced engineer with more than 30 years at Boeing who was brought out of retirement to help fix design issues on jets now being certified said he was among dozens in his Everett-based group laid off Monday, with just one day’s notice.