By Eric M. Johnson

SEATTLE (Reuters) – The number of Boeing Co employees seeking a vaccine exemption on religious or medical grounds has reached more than 11,000 – or nearly 9% of its U.S. workforce – a level many times higher than executives initially estimated, people familiar with the matter told Reuters.

The widespread reluctance has left executives scrambling for a strategy that keeps employees safe and complies with President Joe Biden’s vaccine mandate for federal contractors, but avoids an exodus of engineering and factory labor, the people said.

The standoff comes as the U.S. planemaker tries to muscle through industrial and certification challenges on its 787, 777X and Starliner spacecraft programs, as well as depressed demand and supply-chain shortages.

Late last week, the White House pushed back to Jan. 4 its deadline for employees at federal contractors to be vaccinated or be tested regularly if they receive exemptions.

Boeing on Friday then delayed its deadline by about a month to Jan. 4 for employees to take a COVID-19 vaccine, or file an exemption on religious or medical grounds, according to industry sources and a company email seen by Reuters.

“Compliance remains a condition of employment,” the internal email said.

The Boeing email also said employees whose requests are approved would be required to wear a face covering, physically distance and frequently test for COVID-19.

“Anyone who has not received their final dose or been approved for an accommodation, and registered their vaccination status by Jan. 4, will be issued a final warning, and will be expected to promptly come into compliance if they wish to remain employed at Boeing,” the email said.

A Boeing spokesperson declined to provide a count of vaccination exemption requests.

“Boeing is committed to maintaining a safe working environment for our employees, and advancing the health and safety of our global workforce is fundamental to our values,” the spokesperson said.

EXEMPTION REQUESTS

Wearing a face mask on companywide webcasts, Boeing Chief Executive Dave Calhoun has urged employees to take a vaccine, two employees said.

Two Boeing insiders said executives initially estimated vaccine resistance from some 2% of workers, a number the company could manage. But by last week, one person familiar with the matter said more than 10,000 employees had filed religious exemptions, and a second person said the number stood at more than 11,300. Another 1,000 or so workers filed a medical exemption, another person said.

The fact that the vast majority of applications were on religious grounds has thrust one of America’s largest employers into the center of a debate about the ethics of probing an employee’s religious beliefs.

One person seeking a religious exemption said the company had no right to do so under the law or its own anti-discrimination policies.

Another person, a veteran engineer, said: “The long list of program issues makes it tough to have company pride. The handling of the vaccine mandate is it for many.”

The issue is hitting other aerospace companies. Around 50 employees at Boeing-Lockheed Martin Corp’s United Launch Alliance (ULA) rocket factory in Decatur, Alabama, have already been placed on unpaid leave, or decided to retire early, after refusing to take a vaccine by a company deadline, two of the sources said.

A third person said ULA executives expect in a worst-case scenario to lose 15% of its roughly 2,600-person workforce, or as many as 390 people.

A ULA spokesperson said so far 1% of its workforce, or roughly 26 people, had permanently left the company. ULA “decided to require vaccinations to ensure the health and safety of our employees and to align with our U.S. government customer and industry direction,” the spokesperson said.

The departures come after ULA executives decided to deny all employee applications for an exemption on religious grounds, deciding it would be too time-consuming to evaluate each case, among other reasons, the third person said.

“I don’t conform to strong-arming or coercion,” said ULA welder Brent Vandiver, 45, who was among the workers placed on unpaid leave.

(Reporting by Eric M. Johnson in Seattle; Editing by Joseph White, Matthew Lewis and Michael Perry)

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