Boeing internal memo: Limit travel, overtime, and hiring—and preserve cash
Boeing is implementing new cost-cutting measures as the aerospace giant struggles with the economic fallout from the growing worldwide coronavirus outbreak and its ongoing effort getting the 737 Max back into service.
“The year ahead is shaping up to be as challenging for our business as any in the recent past,” Boeing CEO David Calhoun and CFO Greg Smith say in an internal message announcing the steps to employees Wednesday.
“It’s critical for any company to preserve cash in challenging periods,” the memo says.
To that end, the company is limiting non-essential travel, discretionary spending, overtime, and hiring.
Meanwhile, three workers at Boeing’s Everett plant, where it assembles twin-aisle jetliners, have tested positive for coronavirus.
“The affected employees will remain in quarantine and receive medical care until they’ve made a full recovery and are no longer infectious,” Boeing spokeperson Bradley Akubuiro tells Fortune. “There is no impact on production at this time.”
Whenever there is a high risk that an employee has been exposed to or infected by coronavirus, company health officials interview the worker to assess risks to others, and the work spaces of infected or exposed employees are thoroughly cleaned, Akubuiro says. “Cleaning across the site has also been stepped up, focusing on high-touch areas,” he adds.
In another move to hold onto cash, Boeing plans to tap all of a $13.8 billion loan as soon as Friday, Bloomberg has reported.
Boeing’s stock price closed Wednesday at $189.06, an 18% drop from its previous close at $231.01. To date, Boeing shares have lost half their value in the year since Ethiopia Airlines Flight 302 went down on March 10, 2019, the second crash of a 737 Max airplane that brought to light concerns over the craft’s design.
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