*

Furloughs to impact US-based executives, managers, and

employees

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Boeing ( BA ) and union to resume contract talks with federal

mediators

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Prolonged strike could cost Boeing ( BA ) billions and threaten

credit

rating

By David Shepardson

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

planemaker will temporarily furlough tens of thousands of

employees after about 30,000 machinists went on strike on

Friday, halting production of its 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."

A Boeing ( BA ) spokesperson said the furloughs will impact tens of

thousands of employees.

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 were set to resume contract talks on Wednesday

in the presence of federal mediators, after failing to agree on

key issues such as wages and pensions.

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.

A prolonged strike could cost Boeing ( BA ) several billion dollars,

further straining the planemaker's finances and threatening a

downgrade of its credit rating, analysts said.

The strike, which enters its sixth day on Wednesday, is Boeing's ( BA )

first since 2008 and is the latest event in a tumultuous year

for the planemaker which began with a January incident when a

door panel detached from a new 737 MAX jet in mid-air.

"We won't take any actions that inhibit our ability to fully

recover in the future," Ortberg said on Wednesday. "All

activities critical to our safety, quality, customer support and

key certification programs will be prioritized and continue,

including 787 production."

The strike has halted production of Boeing's ( BA ) best-selling

737 MAX jets, along with its 777 and 767 widebody aircraft,

delaying deliveries to airlines.

Boeing ( BA ) said on Monday it was freezing hiring to cut costs as

its balance sheet is already burdened with $60 billion of debt

and a prolonged strike could damage it further.

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.

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

stock was up 0.3% at $156.86 on Wednesday afternoon.