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.”
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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)
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)
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)
WASHINGTON (AP) — Facing a government shutdown deadline, the Senate rushed through final passage early Saturday of a bipartisan plan that would temporarily fund federal operations and disaster aid, dropping President-elect Donald Trump's demands for a debt limit increase into the new year.
House Speaker Mike Johnson had insisted Congress would “meet our obligations” and not allow federal operations to shutter ahead of the Christmas holiday season. But the day's outcome was uncertain after Trump doubled down on his insistence that a debt ceiling increase be included in any deal — if not, he said in an early morning post, let the closures “start now.”
The House approved Johnson's new bill overwhelmingly, 366-34. The Senate worked into the night to pass it, 85-11, just after the deadline. At midnight, the White House said it had ceased shutdown preparations.
“This is a good outcome for the country, ” Johnson said after the House vote, adding he had spoken with Trump and the president-elect “was certainly happy about this outcome, as well.”
President Joe Biden, who has played a less public role in the process throughout a turbulent week, was expected to sign the measure into law Saturday.
“There will be no government shutdown," Senate Majority Leader Chuck Schumer said.
The final product was the third attempt from Johnson, the beleaguered House speaker, to achieve one of the basic requirements of the federal government — keeping it open. And it raised stark questions about whether Johnson will be able to keep his job, in the face of angry GOP colleagues, and work alongside Trump and billionaire ally Elon Musk, who called the legislative plays from afar.
Trump's last-minute demand was almost an impossible ask, and Johnson had almost no choice but to work around his pressure for a debt ceiling increase. The speaker knew there wouldn’t be enough support within the GOP majority to pass any funding package, since many Republican deficit hawks prefer to slash the federal government and certainly wouldn’t allow more debt.
Instead, the Republicans, who will have full control of the White House, House and Senate next year, with big plans for tax cuts and other priorities, are showing they must routinely rely on Democrats for the votes needed to keep up with the routine operations of governing.
“So is this a Republican bill or a Democrat bill?” scoffed Musk on social media ahead of the vote.
The drastically slimmed-down 118-page package would fund the government at current levels through March 14 and add $100 billion in disaster aid and $10 billion in agricultural assistance to farmers.
Gone is Trump’s demand to lift the debt ceiling, which GOP leaders told lawmakers would be debated as part of their tax and border packages in the new year. Republicans made a so-called handshake agreement to raise the debt limit at that time while also cutting $2.5 trillion in spending over 10 years.
It’s essentially the same deal that flopped the night before in a spectacular setback — opposed by most Democrats and some of the most conservative Republicans — minus Trump’s debt ceiling demand.
But it's far smaller than the original bipartisan accord Johnson struck with Democratic and Republican leaders — a 1,500-page bill that Trump and Musk rejected, forcing him to start over. It was stuffed with a long list of other bills — including much-derided pay raises for lawmakers — but also other measures with broad bipartisan support that now have a tougher path to becoming law.
House Democrats were cool to the latest effort after Johnson reneged on the hard-fought bipartisan compromise.
Rep. Rosa DeLauro, the top Democrat on the Appropriations Committee, said it looked like Musk, the wealthiest man in the world, was calling the shots for Trump and Republicans.
“Who is in charge?” she asked during the debate.
Still, the House Democrats put up more votes than Republicans for the bill's passage. Almost three dozen conservative House Republicans voted against it.
“The House Democrats have successfully stopped extreme MAGA Republicans from shutting down the government, crashing the economy and hurting working-class Americans all across the nation,” House Democratic Leader Hakeem Jeffries said, referring to Trump's “Make America Great Again” slogan.
In the Senate, almost all the opposition came from the Republicans — except independent Sen. Bernie Sanders, who said Musk's interference was “not democracy, that's oligarchy.”
Trump, who has not yet been sworn into office, is showing the power but also the limits of his sway with Congress, as he intervenes and orchestrates affairs from Mar-a-Lago alongside Musk, who is heading up the new Department of Government Efficiency.
The incoming Trump administration vows to slash the federal budget and fire thousands of employees and is counting on Republicans for a big tax package. And Trump's not fearful of shutdowns the way lawmakers are, having sparked the longest government shutdown in history in his first term at the White House.
“If there is going to be a shutdown of government, let it begin now,” Trump posted early in the morning on social media.
More important for the president-elect was his demand for pushing the thorny debt ceiling debate off the table before he returns to the White House. The federal debt limit expires Jan. 1, and Trump doesn't want the first months of his new administration saddled with tough negotiations in Congress to lift the nation's borrowing capacity. Now Johnson will be on the hook to deliver.
“Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling,” Trump posted — increasing his demand for a new five-year debt limit increase. "Without this, we should never make a deal."
Government workers had already been told to prepare for a federal shutdown that would send millions of employees — and members of the military — into the holiday season without paychecks.
Biden has been in discussions with Jeffries and Schumer, but White House press secretary Karine Jean-Pierre said: “Republicans blew up this deal. They did, and they need to fix this.”
As the day dragged on, Senate Republican Leader Mitch McConnell stepped in to remind colleagues “how harmful it is to shut the government down, and how foolish it is to bet your own side won’t take the blame for it.”
At one point, Johnson asked House Republicans at a lunchtime meeting for a show of hands as they tried to choose the path forward.
It wasn’t just the shutdown, but the speaker’s job on the line. The speaker’s election is the first vote of the new Congress, which convenes Jan. 3, and some Trump allies have floated Musk for speaker.
Johnson said he spoke to Musk ahead of the vote Friday and they talked about the “extraordinary challenges of this job.”
Associated Press writers Kevin Freking, Stephen Groves, Mary Clare Jalonick, Darlene Superville and Bill Barrow contributed to this report.
Senate Majority Leader Chuck Schumer, D-N.Y., celebrates as the Senate begins voting on the government funding bill just in time to meet the midnight deadline, at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)
Senate Majority Leader Chuck Schumer, D-N.Y., celebrates as the Senate begins voting on the government funding bill just in time to meet the midnight deadline, at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)
Speaker of the House Mike Johnson, R-La., talks to reporters after passing the funding bill to avert the government shutdown at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/Jose Luis Magana)
Speaker of the House Mike Johnson, R-La., talks to reporters after passing the funding bill to avert the government shutdown at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/Jose Luis Magana)
The Capitol is pictured in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)
Speaker of the House Mike Johnson, R-La., emerges from a closed-door meeting with fellow Republicans at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)
Speaker of the House Mike Johnson, R-La., emerges from a closed-door meeting with fellow Republicans at the Capitol in Washington, Friday, Dec. 20, 2024. (AP Photo/J. Scott Applewhite)
Rep. Dusty Johnson, R-S.D., talks with reporters after attending a meeting with Speaker of the House Mike Johnson, R-La., as the House works on a spending bill to avert a shutdown of the Federal Government, Friday, Dec. 20, 2024, at the Capitol in Washington. (AP Photo/John McDonnell)
FILE - President-elect Donald Trump poses for a photo with Dana White, Kid Rock and Elon Musk at UFC 309 at Madison Square Garden, Nov. 16, 2024, in New York. (AP Photo/Evan Vucci, File)
Speaker of the House Mike Johnson, R-La., talks briefly to reporters just before a vote on an interim spending bill to prevent a government shutdown, at the Capitol in Washington, Thursday, Dec. 19, 2024. The vote failed to pass. (AP Photo/J. Scott Applewhite)
President-elect Donald Trump speaks during a news conference at Mar-a-Lago, Monday, Dec. 16, 2024, in Palm Beach, Fla. (AP Photo/Evan Vucci)
