Boeing announced that in addition to a hiring freeze, it would be furloughing thousands of employees due to the ongoing machinist strike.
Transcript:
Conway Gittens: Here’s what we’re watching on TheStreet today.
Stocks ended lower Wednesday in a volatile session after the Federal Reserve delivered its first interest rate cut since the pandemic policymakers lowered the so-called Fed Funds Rate by 50 basis points to the 4.75 to 5 percent range. This is the lending rate which determines how much borrowers have to pay for business loans, mortgages, car loans and credit cards.
In a press conference, Federal Reserve chairman Jerome Powell said inflation had “eased substantially,” while risks to the labor market had risen enough to warrant this drop in interest rates.
In other news, Boeing has made the decision to furlough a large number of U.S. executives, managers and other staff members. The move comes just days after more than 30,000 Boeing machinists went on strike over a new labor contract. The company said the furloughs would affect tens of thousands of employees. Boeing had already announced it would institute a hiring freeze due to the strike.
Of the furloughs, Boeing CEO Kelly Ortberg said, “While this is a tough decision that impacts everybody, it is in an effort to preserve our long-term future and help us navigate through this very difficult time. We will continue to transparently communicate as the dynamic situation evolves and do all we can to limit this hardship.”
Ortberg revealed that affected employees would be furloughed one week, every four weeks until the labor conflict is resolved. He also said his executive team would teke “commensurate” pay cuts.
The strike has already put Boeing’s credit rating in jeopardy, which would mean higher borrowing costs at a time when revenue on’t be flowing in. Boeing alreadt burned through $8 billion in the first half of the year and the strike will make its financial situation more tenuous.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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