*

Furloughs will affect US-based executives, managers and

workers

*

Union says no progress made in talks with federal

mediators, no

new talks scheduled

*

Lengthy strike could cost billions, threaten credit rating

*

Boeing ( BA ) shares ended down about 1%

(Adds details on Wednesday talks in paragraphs 5-7, Chinese

aircraft order in paragraph 20)

By David Shepardson and Allison Lampert

Sept 18 (Reuters) - Boeing ( BA ) said on Wednesday it

will temporarily furlough tens of thousands of employees after

about 30,000 machinists went on strike on Friday, halting

production of its best-selling 737 MAX and other airplanes.

"We are initiating temporary furloughs over the coming days

that will impact a large number of US-based executives, managers

and employees," CEO Kelly Ortberg said in an email to employees.

"We are planning for selected employees to take one week of

furlough every four weeks on a rolling basis for the duration of

the strike."

The strike, Boeing's ( BA ) first since 2008, adds to a tumultuous

year for the planemaker which began when a door panel blew off a

new 737 MAX jet in mid-air in January.

Ortberg also said he and other Boeing ( BA ) leaders "will take a

commensurate pay reduction for the duration of the strike."

Boeing ( BA ) and the International Association of Machinists and

Aerospace Workers held two days of discussions in the presence

of federal mediators. The union, which said on Tuesday it was

frustrated with the first day of mediation, said late on

Wednesday it had concluded another day of talks with "no

meaningful progress."

"While we remain open to further discussions, whether

directly or through mediation, currently, there are no

additional dates scheduled," the union said. "We are fully

committed to fighting for the contract our members deserve."

Boeing ( BA ) did not immediately respond to a request for comment

on the IAM statement.

The extensive furloughs show Ortberg is preparing the

company to weather a prolonged strike that is not likely to be

easily resolved given the anger among rank-and-file workers.

A protracted labor battle could cost Boeing ( BA ) several billion

dollars, further straining finances and threatening its credit

rating, analysts said.

"It's unlikely that the cuts will fully offset the costs of

a prolonged strike," said Ben Tsocanos, aerospace director at

S&P Global Ratings.

The union has been pushing for a 40% raise over four years

in its first full contract negotiations with Boeing ( BA ) in 16 years,

well above the planemaker's offer of 25%, which was resoundingly

rejected.

Brian Bryant, the IAM's international president, said

actions like furloughs and the cutback in salaries amounted to

"smoke and mirrors," given earlier company spending on bonuses

and compensation for top executives.

"This is just part of their plan to make it look like

they're trying to save money," added Bryant, who was in the

Seattle area picketing on Wednesday with the "resilient"

membership.

"The ball is in Boeing's ( BA ) court. They could settle this

strike tomorrow," Bryant said, adding it would take fair pay,

pension, restoring a bonus and health insurance.

In the email to employees, Ortberg said the company

would not take any "actions that inhibit our ability to fully

recover in the future. All activities critical to our safety,

quality, customer support and key certification programs will be

prioritized and continue, including 787 production."

The company employs about 150,000 people in the United

States. It is unclear exactly which employees are affected by

the furloughs. A union representing Boeing's ( BA ) engineers said

their members were not affected.

The strike, now six days old, also carries risks for the

company's vast network of suppliers, some of whom are also

considering furloughs, several told Reuters.

"Certainly suppliers are worried," said Nikki Malcom, CEO of

the Pacific Northwest Aerospace Alliance. "It's going to have a

significant impact on suppliers if it goes on a long time."

PRODUCTION HALTS

The strike has halted production of Boeing's ( BA ) 737 MAX

narrowbody jets, along with its 777 and 767 widebody aircraft,

delaying deliveries to airlines.

A major Chinese lessor, however, said it placed a fresh

order on Wednesday for 50 MAX jets for delivery from 2028 to

2031, in a sign that longer-term demand for Boeing ( BA ) planes

remains intact.

The manufacturer said on Monday it was freezing hiring to

cut costs as its balance sheet is already burdened with $60

billion of debt.

The company has also stopped placing most orders for parts

for all Boeing ( BA ) jet programs except the 787 Dreamliner, in a move

that will hurt its suppliers.

One senior supplier dismissed the latest announcement as

"panic mode" and said it underscored Boeing's ( BA ) lack of room to

maneuver due to its already-strained balance sheet.

"They would be better to settle; they are getting very near

the precipice," said the supplier, who asked not to be named.

Boeing ( BA ) shares have fallen about 40% so far this year.