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.
Scott
on January 9, 2009 7:31 PM | Reply
This doesn't make sense to me. Boeing has an enormous backlog. I would imagine the only thing holding them back would be the rate at which they could make aircraft. In other words, they pretty much control their own revenue stream, by how fast they make planes. They're shooting themselves in the foot, by laying off, and slowing down. That makes no sense at all to me.
So while the economy stinks, and some carriers will postpone or cancel orders, they'll still have PLENTY of work to do, and plenty of customers that will indeed pay for the product. It's ridiculous.
on January 9, 2009 8:13 PM | Reply
http://speea.org/news/PressReleases/Boeing_layoffs_Jan_2009.pdf
on January 10, 2009 1:23 AM | Reply
"Many of the job reductions will be in overhead functions and other areas not directly associated with airplane production."
They are trimming the fat from the organization. The people that cost Boeing money and slow down productivity. The people that work for Boeing because its a job that pays, and have no concern what so ever about the company or the future of the company except for its stock price because they were granted an ESP..
on January 10, 2009 1:33 AM | Reply
Scott Carson needs to be fired. Carson has consistently mismanaged BCA. Carson really has no credibility when it comes to running a company. As a sales guy, he is all BS all the time and no concrete action. Being so far removed from managing the 7-late-7 program where he just let everything fall apart.
I guess it's part of the good old cronyism at the top where the bad people will always be promoted.
Get rid of Carson before the entire company goes down the toilet.
on January 10, 2009 1:41 PM | Reply
Scott Carson is a camera whore. He spends more time in front of a camera blabbing to the local media or making Boeing BS videos. I've seen him only one time on the shop floor and that was last year. He's totally clueless as to what's going on with the 7-late-7. The layoffs should start with Carson,Jim McNerney and Doug Kight.
on January 10, 2009 7:42 PM | Reply
It is always the same, like a vicious circle, and finally workers are who pay the bad company management. What did happened with Airbus A380 delays? Excelent workers, excelent engineers, excelent resources, excelent sales, but bad managers made big delays due to big lays. That is the same case, but american workers are less social protected than europeans. Sad, very sad...
on January 11, 2009 2:54 PM | Reply
I expect inaccurate, sensationalist headlines from the New York post. Not from Flightblogger.
There aren't going to be 4,000 - 4,500 layoffs. There are going to be that many job reductions. Between Boeing and the contractors you're talking almost 100,000 workers, and in the course of a year there's going to be a lot of attrition. There will be some layoffs because not everybody wants to or can change jobs.
The whole idea of this lean manufacturing stuff is efficiency. That's just another word for fewer jobs.
Hopefully, the managers making up the layoff lists will be paying attention to who's made them selves valueable by going the extra mile and always doing more than they had to, and those who did the bare minimum.
on January 11, 2009 3:20 PM | Reply
Carson missed a leadership opportunity here. I would have loved to have seen a line here saying how he and the other top executives are going to share in the pain by reducing their own pay. A lot of companies downsizing have done this. Even the greedy executives on wall street are giving up compensation.
The letter pays lip service to “competitiveness.” They used that same line in the SPEEA negotiations. That need always seems to stop just before the executive suite. McNerney makes about $20 million a year. Meanwhile the head of EADS/Airbus the main competitor makes about $3 million.
Whatever happened to leadership by example? Then people wonder why this country is going down the tube.
on January 17, 2009 3:03 AM | Reply
Do these layoffs have anything to do with the non-union mechanic contractors that are being brought in from Plane Techs?
Is Boeing try to introduce or drive in a non union factor so they don't have to pay for beneifts and what not? I remember an article about Boeing trying to move some more of their operations to right to hire right to fire states, like a majority of aviation companies that were in California.
Just seems curious that this annoucement was made and Everett is allowing a outside contract company bring in mechanics.