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)

COLORADO SPRINGS, Colo. (AP) — The leader of USA Track and Field cut through confusion surrounding the 2028 Olympic trials, saying the preference is to hold them in the LA Coliseum several weeks before the actual Olympic track meet takes place there.

Max Siegel told The Associated Press on Thursday that the goal is to give U.S. athletes the closest thing to a simulation of the actual Olympics, and that there is no better place to do that than holding the trials in the same stadium as the Games.

He also said plans are for the meet, which traditionally has been spread over 10 days, to be shortened in 2028. Siegel is hoping to have the issue settled by January. Olympic trials usually take place six to eight weeks before track starts at the Games.

“It is no secret that our desire is to have something in the West Coast, and preferably in LA,” Siegel said. “We're going to do everything that we possibly can to try to have our trials” at the Coliseum.

LA chairman Casey Wasserman injected some uncertainty into the issue over the summer when he said he thought hosting the trials so close to the Olympics “adds a level of complexity to our planning that I'm not sure is best for the athletes.”

The main concern was whether the Coliseum, which also hosts University of Southern California football games and other events, would be ready for a world-level track meet in time for trials. There's also the issue of resetting the stadium for the Olympics in the month or so after trials.

Asked on Thursday about LA's current position, the organizing committee sent AP a statement: “We are exploring the possibility of hosting the 2028 Track and Field Trials at the Coliseum in Los Angeles.”

Holding trials at the stadium where the Olympics are taking place would fit with U.S. Olympics in the past: In 1996, they were held at Olympic Stadium in Atlanta and in 1984, they were at the Coliseum.

USATF has held every Olympic trials since 2008 at Hayward Field on the University of Oregon campus in Eugene, Oregon.

AP sports: https://apnews.com/sports

FILE - Noah Lyles celebrates after winning the men's 100-meter final during the U.S. Track and Field Olympic Team Trials, June 23, 2024, in Eugene, Ore. (AP Photo/Charlie Neibergall, File)