"We are also considering the difficult step of temporary furloughs," its CFO told employees
As it struggles under the weight of an ongoing 737 Max crisis and a strike by its machinists, Boeing $BA (BA) has instituted a hiring freeze. In a note to the company’s employees Monday, CFO Brian West said that the company will be doing a good bit of belt-tightening.
“Our business is in a difficult period,” reads the memo, a copy of which was provided to Quartz. “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.”
Beyond a hiring freeze, West said that executive pay raises are paused, corporate travel will be reduced, and “catered meal and food services at Boeing facilities” won’t be happening unless a customer is in town. The planemaker is in a “complex moment” right now, West said at an investment conference last week; a Federal Aviation Administration-mandated production cap in the wake of a 737 Max 9 door plug blowout, a massive cash leak, and now the strike are all creating huge headaches for the company.
In the background of all this, Boeing’s investment-grade credit rating is hanging on by a thread. If the company slips into junk-bond territory, the monetary solutions to any of its challenges will become a lot more expensive. Most worryingly for Boeing’s current employees, West wrote, is that the company is “also considering the difficult step of temporary furloughs for many employees, managers and executives in the coming weeks.”
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