Boeing to begin furloughs, leadership takes a pay cut, as machinist strike continues

As Boeing's machinists continue to strike, furloughs and pay reductions are in store for the rest of the company.

"While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time," Boeing CEO Kelly Ortberg wrote in a letter to company employees Wednesday. He signed off with the phrase, "Restoring trust."

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Ortberg has not been in the CEO role long. He started with the company a little over a month ago. Since then, negotiations went sour with the company's machinist union, which voted to reject a contract offer from Boeing and to go on strike. That strike is ongoing and affects about 33,000 machinists, who work on the 737 Max, the 777, and the 767 cargo plane. Most of the workers are located in Washington state, at factories in Everett and Renton.

Ortberg acknowledged the strike in his letter and said the company is "committed to resetting our relationship" with the union. While the strike continues, Ortberg will take a pay cut, as will others on his leadership team.

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Elsewhere in company, furloughs will be implemented to "preserve cash and ensure that Boeing is able to successfully recover."

"We are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees," Ortberg said. "All benefits will continue for affected employees, and to limit the impact to you, we are planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike."

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Individual teams are being notified about how they will be affected. Ortbert said that Boeing will prioritize safety, customer support, quality, and key certification programs, which include operations related to producing the 787.