The Seattle Times is reporting that Boeing Commericial Airplanes will layoff 4,000-4,500 employees, citing a person familiar with the plan. According to the report, the announcement is expected to come later today. Boeing employs 76,400 68,000 in its commercial airplanes division, the vast majority in Washington state.
UPDATE 1:27 PM ET:
This message was sent to employees from BCA Chief Scott Carson:
From: Scott Carson
Sent: Friday, January 09, 2009 10:00 AM
Subject: Meeting the challenges of 2009
***This message is being sent by Scott Carson, president and CEO of Commercial Airplanes, to all Commercial Airplanes employees.***
Meeting the challenges of 2009
As we look forward to 2009 and see daily headlines of how a growing global recession is impacting economies, it is clear that industries and individuals must prepare for a year of tough challenges.
Airlines are seeing passenger and freight traffic decline. Our customers are cutting back on capacity by parking older airplanes, reducing orders for spares and taking other steps to deal with the current business environment.
Orders for new airplanes, while still at high levels, tapered off in 2008 after three consecutive record years. In addition, Commercial Airplanes delivered fewer airplanes than projected and rescheduled the 787 Dreamliner and the 747-8 development programs.
To stay ahead of these challenges, we are taking prudent actions to make sure Commercial Airplanes remains well positioned in today's difficult economic environment. These steps will allow us to be in a financial position to adapt to uncertainties, meet our customer commitments and continue investing in our current and future product lines. We must also protect our competitiveness in a fiercely competitive business environment - our competition is not standing still, and neither can we.
We have already begun a program to reduce overhead costs and discretionary spending. This includes cutting back on travel and carefully managing inventory costs. We also took steps in the final months of 2008 to slow our hiring and leave some open positions unfilled.
As part of this overall effort to meet our business plan and address current business realities, we will be reducing employment by about 4,500 positions. Normal attrition and a reduction in non-Boeing labor will account for some of the job reductions, but layoffs of Boeing employees also are necessary. This is a difficult and painful decision. Many of the job reductions will be in overhead functions and other areas not directly associated with airplane production. This will enable us to continue our high production rates and successfully execute our key development programs.
Initial 60-day layoff notices will be issued on Feb. 20, and most layoffs will occur in the second quarter of the year. As we've always done, Boeing will support employees with layoff benefits and career-transition services. Next week, Doug Kight will provide managers with more information about the process we'll use.
Any decision involving involuntary job reductions is hard to make, but decisive steps now will improve our ability to meet our commitments and remain competitive as we move through this economic recession. At the same time, we must keep our focus on key imperatives in 2009, which include:
• Successfully executing our development programs (including certifying the 777 Freighter, flight testing the 787 Dreamliner, beginning final assembly of the 747-8 and continuing production of the P8-A).
• Delivering on our strong backlog by meeting our commitments to our customers.
• Continuously improving quality and productivity.
• Continuing the high level of customer support provided by Commercial Aviation Services.
Given these challenges, we will take special care to ensure that we retain the skills and resources needed to continue to be successful. We regret the disruption to employees and their families, but we believe that acting now will allow us to keep employment reductions to a minimum while we meet these key challenges, enhance our competitiveness and adapt to the uncertainties of this economic cycle.
Through this uncertain period, I must ask everyone to stay focused on meeting our commitments. Our customers are depending on us.