“Initial 60-day layoff notices will be issued on Feb. 20, and most layoffs will occur in the second quarter of the year,” said Scott Carson, chief executive of Commercial Airplanes in an internal message to employees Friday morning.
Most of the cuts will be in Washington state, where Boeing employs more than 76,400 people. The vast majority of them are in the Commercial Airplanes unit, so this represents more than a 5 percent work force cut.
In his message, Carson called the move “a difficult and painful decision” made necessary by a dramatic slowdown in airline business and the broader impact of the global recession.
Both passenger and freight air traffic has sharply decreased worldwide since September, Carson said. Airlines are cutting capacity, parking older planes and reducing orders for spare parts. And new jet orders tapered off in 2008.
“Industries and individuals must prepare for a year of tough challenges,” Carson told employees. “We believe that acting now will allow us to keep employment reductions to a minimum while we adapt to the uncertainties of this economic cycle.”
Carson said Boeing does not intend to cut its production rates or put off any of its new airplane programs.
Some Wall Street observers, such as UBS analyst David Strauss, think Boeing may still be forced to slow production.
“We think Boeing will inevitably lower production in the face of declining air traffic and limited aircraft financing and we believe the sooner that it can put the delivery peak behind it the better,” Strauss wrote in a note to clients Friday. “We believe the eventual recovery in the aerospace stocks won’t happen prior to production rates getting more realistic.”
Source : AJC
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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