Boeing to lay off 10pc of workforce in bid to recoup finances, end mass employee strike impeding jet production
Boeing plans to lay off 10 per cent of its workers in coming months as it continues to lose money and tries to deal with a strike that is crippling production of its best-selling airline planes.
In short:
Boeing has announced it will cut 10 per cent of its workforce — 17,000 workers — in the coming months, after suffering heavy production losses.
More than 33,000 of its factory workers have been on strike since mid-September over higher wage demands.
What's next?
The company is already about $US60 billion in debt and expecting to plummet a further $US5 billion in this year's third quarter.
Boeing will cut 17,000 jobs, delay first deliveries of its 777X jet by a year and record $US5 billion ($7.4 billion) in losses in the third quarter, as the US plane-maker continues to spiral during a month-long strike.
CEO Kelly Ortberg said in a message to employees Boeing must shrink its workforce "to align with our financial reality" after an ongoing strike by 33,000 US West Coast workers stopped production of its 737 MAX, 767 and 777 jets.
"We reset our workforce levels to align with our financial reality and to a more focused set of priorities. Over the coming months, we are planning to reduce the size of our total workforce by roughly 10 per cent," his message said.
"These reductions will include executives, managers and employees."
Boeing shares fell 2.12 per cent in after-market trading.
The sweeping changes are a big move by Mr Ortberg, who arrived in August at the helm of the beleaguered plane maker promising to reset relations with the union and its employees.
Thomas Hayes, equity manager at Great Hill Capital, said by email the lay-offs could put pressure on employees to end the strike.
"Striking workers who temporarily do not have a pay cheque, do not want to become unemployed workers who permanently do not have a pay cheque," he said.
"I would estimate the strike will be resolved within a week as these workers do not want to find themselves in the next batch of 17,000 cuts."
About 33,000 union machinists have been on strike since September 14.
Boeing factory workers and supporters gather on a picket line near the entrance to a Boeing production facility in Renton, Washington, on Friday.
Two days of talks this week failed to produce a deal, and Boeing filed an unfair-labour-practices charge against the International Association of Machinists and Aerospace Workers.
Ratings agency S&P estimated the strike is costing Boeing $1 billion a month and the company risks losing its prized investment-grade credit rating.
The company has about 170,000 employees worldwide, many of them working in manufacturing facilities in the states of Washington and South Carolina.
Boeing had already imposed a furlough program for salaried employees last month, but Mr Ortberg said those would be suspended because of the impending lay-offs.
Deepening debt
Boeing recorded pre-tax earnings charges totalling $US5 billion for its defence business and two commercial plane programs. The company has lost more than $US25 billion since the start of 2019.
In its third-quarter earnings report to be released on October 23, it now expects revenue of $US17.8 billion, a loss per share of $US9.97, and a better-than-expected negative operating cash flow of $US1.3 billion.
Analysts on average were expecting Boeing to generate quarterly cash burn of negative $US3.8 billion, according to LSEG data.
Mr Ortberg also said Boeing would further delay the rollout of a new plane, the 777X, to 2026 instead of 2025, due to challenges in development, the flight-test pause and the work stoppage.
It will also stop building the cargo version of its 767 jet in 2027 after completing and delivering the remaining 29 planes ordered
"While our business is facing near-term challenges, we are making important strategic decisions for our future and have a clear view on the work we must do to restore our company," the CEO said in a statement.
Even before the strike began on September 13, the company had been burning cash as it struggled to recover from a January mid-air panel blowout on a new Max during an Alaska Airlines flight that exposed weak safety protocols and spurred US regulators to curb its production.
Boeing has agreed to plead guilty and pay a fine for conspiracy to commit fraud tied to that jet, but relatives of the 346 people who died in two Max crashes want tougher punishment.
Reuters/AP
By：https://www.abc.net.au/news/2024-10-12/boeing-to-cut-one-tenth-of-its-workforce-after-record-losses/104465274(责任编辑：admin)
下一篇：When is the US election and how does it work? Here's what you need to know about the 2024 presidential race
Socceroos rescue a point 
Wallabies thrash Wales 52
Jake Paul beats Mike Tyso
Live updates: England vs 
US election 2024: Donald 
US election live: Kamala
- ·North Korea's latest weapon agains
- ·Hezbollah says Israel 'cannot impo
- ·Inside the rise of US oligarchs and how
- ·Thailand's worst suspected serial
- ·Tabi shoes are turning heads from Holly
- ·FBI arrests Florida man planning attack
- ·Illegal immigrant gets life sentence fo
- ·Bibles, water, watches and sneakers: Do
- ·North Korea's latest weapon against
- ·Hezbollah says Israel 'cannot impose
- ·Inside the rise of US oligarchs and how i
- ·Thailand's worst suspected serial ki
- ·Tabi shoes are turning heads from Hollywo
- ·FBI arrests Florida man planning attack o
- ·Illegal immigrant gets life sentence for
- ·Bibles, water, watches and sneakers: Dona
- ·US to give Kyiv anti-personnel landmines
- ·An arrest warrant for Benjamin Netanyahu
- ·One of Vietnam's high-profile politi
- ·Shanghai Walmart Attack: A Man Randomly S
- ·South Korean police officers jailed over
- ·Cambodia publicly shames maid deported af
- ·North Korea to use all forces including n
- ·Philippines condemns China attack of Viet
- ·US adds 2 more Chinese companies to Uyghu
- ·North Korean defector steals South Korean
- ·Malaysia deports Cambodian worker for cal
- ·Rebels battle for Myanmar junta’s weste