Boeing to fire thousands of workers as strike shows no signs of ending

CRYSTAL CITY, Virginia: Boeing is preparing to issue layoff notices to thousands of employees amid deepening turmoil.

According to union and industry sources, the first notices are expected in the coming weeks.

This follows Boeing's recent announcement to cut 17,000 jobs and take US$5 billion in charges, marking another tumultuous chapter for the company in 2024.

Acting U.S. Labor Secretary Julie Su has flown to Seattle to mediate the ongoing labor strike, meeting with Boeing and the International Association of Machinists and Aerospace Workers (IAM).

"Acting Secretary Su is meeting with both parties today to assess the situation and encourage both parties to move forward in the bargaining process," a Department of Labor spokesperson said this week.

Su's visit comes as 33,000 Boeing workers have been on strike since mid-September, demanding a 40 percent wage increase over four years. This is Su's first in-person intervention to help resolve the dispute.

Boeing will send out 60-day layoff notices to thousands of workers next month, many from its commercial aviation division. Depending on the company's needs, a second round of notices could follow in December. Boeing informed the engineers' union that their members would receive layoff notices starting November 15.

The job cuts come as Boeing faces numerous challenges, including delays in the 777X jetliner program and the end of civil 767 freighter production. Despite these layoffs, the company has been cautious about offering voluntary departures, aiming to retain critical talent in a post-pandemic environment where skilled workers are in short supply.

Industry concerns are growing over Boeing's ability to navigate its ongoing crises. Emirates Airline President Tim Clark, a major Boeing customer, has expressed serious concerns about the company's ability to meet delivery forecasts, raising the possibility of commercial repercussions.

"We will be having a serious conversation with them over the next couple of months," he said. "I fail to see how Boeing can make any meaningful forecasts of delivery dates."

"Unless the company is able to raise funds through a rights issue, I see an imminent investment downgrade with Chapter 11 looming on the horizon," Clark told the Air Current, an aviation industry publication.

Boeing's financial health is also under scrutiny, with analysts suggesting the company may need to raise $15 billion through a share issue to stabilize its position.

Although Boeing currently holds over $10 billion in cash, analysts warn that further funding will be needed by the end of the year to ease financial pressure. Ratings agency S&P has also cautioned that Boeing risks losing its investment-grade credit rating if its financial situation deteriorates.