Boeing to slash 17,000 jobs – 10% of its workforce – as factory strike enters its fifth week following safety controversies
Boeing plans to lay off about 10% of its employees, about 17,000 people, in the coming months as it continues to lose money and tries to cope with a strike that is crippling production of the company’s best-selling planes.
New CEO Kelly Ortberg told staff in a memo Friday that the job cuts will affect executives, managers and employees.
The company has approximately 170,000 employees worldwide, many of whom work in manufacturing facilities in Washington and South Carolina.
Boeing announced that it intends to reduce 10 percent of its workforce, because it projected a large loss of the third quarter after a machinist strike in the Seattle region
Boeing has agreed to argue and pay a fine of $ 243.6 million to prevent a criminal trial for conspiracy to commit fraud linked to the maximum but family members of the 346 people who died in two Max -Crashes willen moeilijkere straffen.
Boeing staff with the International Association of Machinists and Aerospace Workers walked the job on 13 September after they had overwhelmed a contract offer.
Boeing had already imposed rolling temporary furloughs, but Ortberg said they will be suspended because of the impending layoffs.
Unpainted Boeing 737 Max aircraft are seen at the company’s facilities in Washington state
The company will further delay the rollout of a new aircraft, the 777X, to 2026 instead of 2025.
It will also stop building the cargo version of its 767 jet in 2027 after completing current orders.
Boeing has lost more than $25 billion since the beginning of 2019.
About 33,000 union drivers have been on strike since September 14.
Two days of conversations this week did not lead to an agreement, and Boeing has filed an indictment for unfair work practices against the International Association of Machinists and Aerospace Workers.
Boeing was hopefully voted on having a strike after it had reached a provisional agreement that included a general wage increase of 25 percent over a period of four years
Boeing said it burned $1.3 billion in cash during the quarter and lost $9.97 per share.
Industry analysts had expected the company to lose $1.61 per share in the quarter, according to a FactSet survey.
Boeing announced a number of major depreciation on Friday: a burden of 2.6 billion dollars in connection with delays from the $ 777x, $ 400 million for the $ 767 and $ 2 billion for defense and space programs, including new Air Force One-Jets, one ruimtecapsule voor NASA en een militair toestel. tank truck refueling.
The Arlington, Va.-based company said it had $10.5 billion in cash and marketable securities as of Sept. 30. Boeing will release full third-quarter figures on October 23.
The strike has a direct impact on cash burn because Boeing gets half or more of the price of planes when it delivers them to airline customers.
The strike has shut down production of the 737 Max, Boeing’s best-selling plane, and 777s and 767s.
The company still makes 787s at a non-union plant in South Carolina.
The new CEO faces many challenges in changing the company.
“Our company is in a difficult position and it is difficult to overestimate the challenges with which we are dealing with,” Ortberg told the staff.
Ethiopian Airlines’ chief pilot asked Boeing for emergency procedures for the 737 Max just months before the deadly 2019 crash (photo)
The families have long been insisting on a criminal trial, with the argument that this could prove that Boeing managers knew that they misled the FAA about the poor flight control system.
He said the situation “requires difficult decisions and we will need to make structural changes to ensure we remain competitive and deliver for our customers in the long term.”
“Although our company stands for challenges in the short term, we make important strategic decisions for our future and we have a clear picture of the work that we have to do to restore our company,” said Ortberg.
Ortberg also promised to take ‘additional supervision’ on the defense and space activities of Boeing in difficulty, which will suffer ‘substantial new losses’ in the third quarter, he told the employees in the message.
Ortberg took the helm at Boeing in August, becoming the troubled company’s third CEO in less than five years. He is a long-time aerospace industry executive, but a Boeing outsider.