- Boeing will cut about 17,000 jobs, 10 percent of its global workforce
- The manufacturer will also push back deliveries of the 777X by another year
Boeing will cut about 17,000 jobs and delay the first deliveries of its 777X jet by a year, the US plane maker said, as it contends with a worker strike and fears over its safety record.
As well as cutting 10 percent of its global workforce, the manufacturer said it would also discontinue the 767 cargo plane.
CEO Kelly Ortberg told employees that the downsizing was needed ‘to align with our financial reality’ in the face of a damaging strike by 33,000 machinists.
‘These reductions will include executives, managers and employees,’ Ortberg said.
Boeing factory workers and supporters picket near the entrance to a Boeing production facility in Renton, Washington
Boeing announced plans to cut 10 percent of its global workforce as it deal with a machinist strike
The beleaguered company has faced extra federal scrutiny since a panel blew out of of its 737 MAX jet during an Alaska Airlines flight in January.
The changes mark a major step by Ortberg, who arrived in August to revamp the beleaguered plane maker that’s struggled with production issues and is running out of cash.
Thousands of members of the International Association of Machinists and Aerospace Workers (IAM) have been on strike since September 13, seeking 40-percent wage increases and better pensions.
Negotiations between Boeing and union leaders broke down this week, eroding hopes of a quick end to the action, which has halted production of its 737 MAX, 767 and 777 jets.
‘Our business is in a difficult position, and it is hard to overstate the challenges we face together,’ Ortberg said.
‘We need to be clear-eyed about the work we face and realistic about the time it will take to achieve key milestones.’
Acting US Labor Secretary Julie Su flew to Seattle on Monday to intervene in the labor dispute.
‘She’s there to offer support to both parties throughout the bargaining process,’ her spokesperson said.
Reaching a deal to end the strike is critical for Boeing, which depends on production of the 737 for much of its cash.
The union representing striking workers said in a statement that discontinuing the 767 was troubling and that it would assess its implications.
Even before the strike began, Boeing had been burning cash as it struggled to recover from the mid-air panel blowout on a new plane.
Reaching a deal to end the strike is critical for Boeing, which depends on production of the 737 MAX for much of its cash
The Federal Aviation Administration increased scrutiny of the company after a panel blew out of a MAX plane during an Alaska Airlines flight in January
The chaos aboard the Alaska Airlines flight exposed weak safety protocols and spurred US regulators to curb its production.
Meanwhile, Boeing’s one-year delay in the 777X was widely expected in the industry.
The delay pushes back deliveries to 2026.
Boeing in August grounded its test fleet after finding problems with the jets’ initial test flights.
The plane, designed for airlines seeking to connect major cities and carry some 400 passengers, is already years behind.
Boeing unveiled the plane in 2013 and scheduled deliveries for 2020. It has about 480 unfilled orders for the plane.
Emirates Airline President Tim Clark, who had an initial order for 150of the jets, hit back at the delay.
‘We will be having a serious conversation with them over the next couple of months,’ he said.
Clark also criticized Boeing’s new timetable for scrapping a certification testing milestone amid the strike.
‘I fail to see how Boeing can make any meaningful forecasts of delivery dates,’ he said.
Ortberg took over at Boeing in August, becoming the troubled company’s third CEO in less than five years. He is a longtime aerospace-industry executive, but an outsider to Boeing.
