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Boeing (BA) announced layoffs Friday, blaming the cuts on an ongoing strike by its union-represented machinists. The company is letting go of 10% of its workforce, which according to its most recent annual report, would be about 17,000 people out of a job.
“While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company,” CEO Kelly Ortberg said in a memo to the company’s staff that was made public. “These decisive actions, along with key structural changes to our business, are necessary to remain competitive over the long term.”
In a separate update to investors Friday setting up expectations for a weak third quarter, Boeing specifically said that its results were “impacted by the International Association of Machinists and Aerospace Workers (IAM) work stoppage and charges in the commercial airplanes and defense segments.”
The day before, Boeing filed an unfair labor practice charge with the National Labor Relations Board, accusing the machinists’ International Association of Machinists and Aerospace Workers of bargaining in bad faith. That move came after the company withdrew what it said was its “best and final” contract offer and walked away from the bargaining table following months of negotiations that resulted in tentative agreement that the IAM’s membership rejected.
It was not the first time that accusations of bad-faith bargaining have flown during the tense negotiations. The IAM said that Boeing’s “best and final” offer, a 30% raise compared with the 25% bump that was in the voted-down tentative agreement, was improperly negotiated and a “blatant show of disrespect” to the workers. It is seeking a 40% raise for its members, as well as the restoration a pension that ceased being offered to new employees in 2014.
“Your Negotiating Committee did not have any discussion or input on this offer,” the union told its members at the time. “We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready. These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.”
Since the strike began, one that some analysts estimate is losing the company $50 million a day in badly needed cash, Boeing has also furloughed much of its staff and cut health care benefits for the IAM’s members. Still, the union has said that it is “in this for the long haul.”
In a statement provided to Quartz, the IAM was still holding out hope that Boeing would come back to the table.
“In spite of management’s recent blunders, striking Boeing workers remain committed to reach an agreement with the company that acknowledges the decade of sacrifices they made for the company’s benefit,” it said.
