Boeing says it's considering temporary layoffs to save cash during the strike by machinists

SEATTLE (AP) — Boeing plans to freeze hiring and reduce travel and is considering temporary layoffs to save cash during a factory workers’ strike that began last week, the company told employees Monday.

The company said the moves, which include reduced spending on suppliers, were necessary because “our business is in a difficult period.”

Chief Financial Officer Brian West detailed 10 immediate cutbacks in a memo to employees. They include a freeze on hiring across all levels, pausing pay increases for managers and executives who get promoted, and stopping all travel that isn’t critical.

“We are also considering the difficult step of temporary furloughs for many employees, managers and executives in the coming weeks,” West said.

Boeing's business is in a difficult spot, he said, adding: “This strike jeopardizes our recovery in a significant way.”

About 33,000 workers represented by the International Association of Machinists and Aerospace Workers began a strike early Friday. The walkout came after workers rejected an offer of a 25% increase in pay over four years. The union originally sought a pay hike of at least 40%.

Representatives of the company and the union are scheduled to meet Tuesday with federal mediators. The union has started to survey its members to learn what they want most in a new contract.

Striking workers are picketing at several locations around Washington state, Oregon and California.

Outside Boeing's huge factory in Everett, Washington, Nancie Browning, a materials-management specialist at Boeing for more than 17 years, said last week’s offer was worse than the one that prompted a two-month strike in 2008. She said that without annual bonuses that workers have come to depend on, the proposed pay increase was more like 9%, not 25%.

“We just want a piece of the pie like everybody else,” she said. “Why should we work all this overtime and bust our backs while these guys (Boeing executives) are sitting sitting up in their suites just raking in the cash?”

The bonuses have emerged as a flash point for union members. Workers say they range from $3,000 to $5,000 a year.

Boeing says it is hard to calculate bonuses in a way that is fair to 33,000 people who perform different jobs. So instead, the company proposes to ditch the payouts and replace them with automatic contributions of $4,160 per year to each employee’s 401(k) retirement account.

Workers are bitter that in contract extensions over the past 16 years, Boeing ended its traditional pension plan and lowered health care benefits.

“We want our pension back,” said Jacob Bustad, a machinist with Boeing for 14 years who was also on the picket line in Everett. “We just keep losing and we never gain, while the people at the top just get more and more money. Boeing has done really good for me and my family, but these last years have been hard."

Boeing has lost more than $25 billion since the start of 2019, and burned through $4.3 billion in the second quarter of 2024 alone as it stood poised to post another money-losing year. The strike will delay deliveries of new planes, which are an important source of cash for the company.

Stephanie Pope, the head of Boeing’s commercial-airplanes division, cited the company’s $60 billion in total debt in urging blue-collar workers to accept the contract offer last week. She called it the best offer Boeing had ever made — and endorsed by the union's local president and negotiators.

But workers rejected the recommendation of their own leaders, which had not happenedsince 1995.

Additional cost-cutting moves spelled out in the chief financial officer's memo included eliminating first- and business-class service for anyone on travel that is deemed critical, and stopping spending on outside consultants.

West also said Boeing plans to make “significant reductions in supplier expenditures” and will stop most supplier purchase orders related to the 737, 767 and 777 airplane models.

After the strike started, Moody’s put Boeing on review for a possible credit downgrade, and Fitch said a strike longer than two weeks would make a downgrade more likely. Both agencies rate Boeing debt one notch above non-investment or junk status.

Koenig reported from Dallas.

13-year Boeing employee Denise Strike waves a picket sign while striking with other employees after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Extra picket signs sit on the sidewalk as Boeing workers strike after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Boeing workers wave picket signs as they strike after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Boeing workers boo a car turning into the Everett factory parking lot as they wave picket signs while striking after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Denise Strike, a 13-year employee of Boeing, right, waves picket signs with 10-year employee Jacob Larson, left, as they strike after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Jacob Bustad, a machinist who has worked for Boeing for 14 years, holds up a fist to passing drivers as union members work the picket line after voting to reject a contract offer and go on strike, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

Boeing wing mechanic lead Lee Lara, who has worked for the company for 16 years, yells in response to honks from passing drivers as workers wave picket signs while striking after union members voted to reject a contract offer, Sunday, Sept. 15, 2024, near the company's factory in Everett, Wash. (AP Photo/Lindsey Wasson)

The rock band R.E.M. is putting out a special rerelease of its first single, “Radio Free Europe,” to benefit — wait for it — the actual Radio Free Europe.

Radio Free Europe/Radio Liberty is among the U.S. government-funded media services that deliver news in overseas markets. President Donald Trump's administration, claiming they are wasteful and promote a liberal point of view, is trying to choke off their funding.

A federal judge this week ordered the Republican administration to restore $12 million to Radio Free Europe/Radio Liberty that was appropriated by Congress. Lawyers for the service, which has been operating for 75 years, said it would be forced to shut down in June without the money.

In the first line of its song “Radio Free Europe,” R.E.M.'s Michael Stipe sings: "Decide for yourself if radio's going to stay.”

“Whether it's music or a free press — censorship anywhere is a threat to the truth everywhere,” Stipe said on Friday. “On World Press Freedom Day, I'm sending a shout-out to the brave journalists at Radio Free Europe.”

Stephen Capus, RFE/RL president, said R.E.M.'s music has always represented a celebration of freedom to him. He said inspiring and upholding freedom to audiences that might not always experience it is the goal of his organization's journalists.

Released on a tiny independent label, the “Radio Free Europe” single was the first the world had heard from the Athens, Georgia-based band, whose career eventually took it to the Rock and Roll Hall of Fame. The band called it quits in 2011.

The song was later inducted into the Library of Congress' National Recording Registry for setting the pattern for independent rock releases at the time.

The five-song EP will include the original recording of the song and a remix made this year by the band's collaborator Jacknife Lee. It will also contain three other songs made at the same time: the single's B-side, “Sitting Still”; the instrumental “Wh. Tornado”; and a previously unreleased “Radio Free Dub” remix.

The producer of the original recording session, Mitch Easter, is supervising this year's rerelease. It's available for streaming on Friday, and a special vinyl pressing can be bought at independent record stores and R.E.M.'s mail order store. Proceeds from all vinyl sales go to RFE/RL.

David Bauder writes about the intersection of media and entertainment for the AP. Follow him at http://x.com/dbauder and https://bsky.app/profile/dbauder.bsky.social.

FILE - Michael Stipe, of the band R.E.M., center, speaks as he accepts the Video Vanguard award during the 1995 MTV Video Music Awards at Radio City Music Hall in New York on Sept. 7, 1995. Standing by are fellow band members, from left, Mike Mills, Peter buck and Bill Berry. (AP Photo/Bebeto Matthews, File)