Boeing to refund lost pay to employees furloughed during Machinists strike

In a goodwill gesture to Boeing employees who were furloughed during the Machinists’ strike, new CEO Kelly Ortberg on Thursday afternoon sent out a message saying the company will return the pay they lost.

Boeing instituted rolling furloughs in September, with tens of thousands of employees asked to take off one out of every four weeks unpaid so the company could conserve cash.

“I know the last few months have been difficult for our company, and for many of you personally,” Kelly wrote. “As we navigated through the work stoppage, we asked many of you to take a furlough to support our cash conservation efforts.”

“Your sacrifice made a difference and helped the company bridge to this moment,” he continued. “We want to acknowledge your support by returning your lost pay.”

The furlough program, which Boeing had never previously conducted and applied only to nonunion employees, was stopped after just a month, so those affected had lost one week’s pay. Many applied for unemployment benefits, but didn’t receive them because the state doesn’t pay for the first week of unemployment.

Those furloughs are distinct from the involuntary layoffs announced in October, aimed at reducing the company workforce by 10%. Those are still in the works, with employees set to hear next week who will be cut.

“We will continue forward with our previously announced actions to reduce our workforce levels to align with our financial reality and a more focused and streamlined set of priorities,” Ortberg wrote Thursday. “These structural changes are important to our competitiveness and will help us deliver more value to our customers over the long term. "

However, the immediate cash crunch from the strike that triggered the furloughs was eased late last month when Boeing raised more than $21 billion by selling stock and stock-linked bonds.

And with the strike over and the Machinists returning to work with a $12,000 bonus for accepting the contract, it seems Ortberg acted to allay any perceived unfairness.

A longtime nonunion employee on the quality staff, who asked not to be named to protect his job, said the furloughs had seemed “an odd way of taking care of the people not on strike” and that they destroyed productivity that month as affected employees like him scrambled to figure out the impact and what to do.

“Obviously your time is not spent focusing on work, but on OK, how am I going to handle this? How do I pay my bills? How do I apply for unemployment?” he said.

The staffer said Thursday he’s “really happy” at the course reversal.

“There’s still a lot of mistrust,” he said. “There’s still this sense of, ‘Wow, can I trust the company?’” And yet, he continued, “this is a step in the right direction.”

The staffer said he welcomes Ortberg’s repeated reprise in company messages of former Commercial Airplanes CEO Alan Mulally’s motto during the original 777 program: “Working Together.”

“There hasn’t been a lot of we’re all in this together lately,” he said, adding that, more than words, Ortberg needs to “keep acting and behaving as a person that really cares for the people that build the airplanes.”

Ortberg closed out his message Thursday, by writing “We appreciate your understanding, sacrifice and most of all, resilience through this time.”

“We have hard work ahead to restore our company,” he wrote. “But we are on the right path and making the right changes. I’m confident in you and our future.”