Why Boeing is furloughing some workers

Boeing has made the decision to furlough a large number of U.S. executives, managers and other staff members.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange. Here's what we're watching on

00:03the street today. Stocks ended lower in a volatile session after the Federal Reserve

00:08delivered its first interest rate cut since the pandemic. Policymakers lowered the so-called Fed

00:14funds rate by 50 basis points to the 4.75 to 5 percent range. This is the lending rate which

00:20determines how much borrowers have to pay for business loans, mortgages, car loans, and credit

00:26cards. In a press conference, Federal Reserve Chairman Jerome Powell said inflation had, quote,

00:31eased substantially while risks to the labor market had risen enough to warrant this drop

00:37in interest rates. In other news, Boeing has made the decision to furlough a large number of U.S.

00:43executives, managers, and other staff members. The move comes just days after more than 30,000

00:50Boeing machinists went on strike over a new labor contract. The company said the furloughs would

00:54affect tens of thousands of employees. Boeing had already announced it would institute a hiring

01:00freeze due to the strike. Of the furloughs, Boeing CEO Kelly Ortberg said, quote, while this is a

01:07tough decision that impacts everybody, it is an effort to preserve our long-term future and helps

01:13us navigate through this very difficult time. We will continue to transparently communicate as this

01:20dynamic situation evolves and do all we can to limit this hardship. Ortberg revealed that affected

01:26employees would be furloughed one week every four weeks until the labor conflict is resolved. He also

01:33said his executive team would take, quote, commensurate pay cuts. The strike has already put

01:39Boeing's credit rating in jeopardy, which would mean higher borrowing costs at a time when revenue

01:45won't be flowing in. Boeing already burned through $8 billion in the first half of the year

01:51and the strike will make its financial situation more tenuous. That'll do it for your daily

01:57briefing from the New York Stock Exchange. I'm Conway Gittins with The Street.