Boeing plans to cut 17,000 jobs – a 10th of its workforce – as it battles an ongoing strike and plane safety issues.
Executives and managers will be among those axed, the aircraft manufacturer’s new chief executive Kelly Ortberg told staff in a memo yesterday.
Boeing has around 170,000 employees across the world, many of them employed at manufacturing facilities in the states of Washington and South Carolina in the US.
The company – which has lost more than $25 billion since the start of 2019 – had already imposed rolling temporary furloughs, but Mr Ortberg said those will be suspended because of the layoffs.
The planned 2025 launch of a new plane, the 777X, will now happen in 2026. The firm will also stop building the cargo version of its 767 jet in 2027 after finishing current orders.
About 33,000 union machinists have been on strike for around a month, fighting for a better pay package
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.
Quality and safety concerns
Boeing’s financial issues – which have not been helped by the strike – are largely down to quality and safety issues that have plagued its aircraft. over the past few years.
This includes two fatal crashes, one in Indonesia in 2018 and another in Ethiopia in 2019, that killed a total of 346 people.
Both involved the Boeing 737 Max, leading to a 20-month grounding of the company’s best-selling jets. This cost the firm more than $21 billion.
It was also fined $487.2 million by the US Justice Department for fraud, in this case deceiving the Federal Aviation Administration over the two crashes, and ordered to invest at least $455 million to improve safety.
Another serious incident happened in January this year, when a Boeing 737 Max owned by Alaskan Airlines lost a door panel shortly after takeoff from Portland, Oregon in the US, forcing the plane to make an emergency landing.
As a result the US Federal Aviation Administration ordered the temporary grounding of all 737 Max 9 planes.
Also this year, wheels have come off Boeings shortly after take off on two separate occasions, both in the US.
Growing concern over the quality of Boeing aircraft has led to less planes being ordered and fewer investors.
As it announced layoffs, Boeing also gave a preliminary report on its third-quarter financial results.
It said the company burned through 1.3 billion dollars in cash during that period and lost 9.97 dollars per share.
The strike has shut down production of the 737 Max, as well as production of the 777x and 767s.
The business is still making 787s at a non-union plant in South Carolina.
Mr Ortberg told staff: ‘Our business is in a difficult position, and it is hard to overstate the challenges we face together.”
He said the situation ‘requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term’.
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