Boeing preps to furlough executives, managers as machinist strike nears

Sept. 18 (UPI) -- Boeing will furlough tens of thousands of its executives, managers and others as more than 30,000 machinists intend to go on strike Friday in Seattle and Oregon.

Boeing CEO Kelly Ortberg in an email message Wednesday notified employees who will be affected by the temporary job losses after 96% of the aircraft and aerospace company's machinists rejected a new labor contract and announced they would walk off the job shortly after midnight Friday.

Boeing and union officials negotiated a new contract that included a 25% wage increase over its duration, but union workers rejected it last week.

A 25% wage increase isn't enough to keep pace with the increased cost of living in Seattle, where Boeing is based, and the contract would not restore their pensions, several workers told CNBC .

Ortberg has been Boeing's CEO for about six weeks and said the furloughs would require affected executives, managers and workers to stay home one out of every four weeks until the strike is resolved.

Orberg also said he and other executives will take pay cuts while the strike is underway.

Boeing officials also will freeze hiring and employee raises and temporarily halt the use of non-essential contractors to reduce costs while the strike continues.

Boeing will continue manufacturing its 787 Dreamliner aircraft at its non-union factory is South Carolina.

Boeing also will continues activities that are "critical to our safety, quality, customer support and key certification programs" during the strike, Ortberg said.