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Boeing seeks voluntary staff lay-offs as market demand shifts

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Via Financial Times

Boeing is asking for buyout volunteers, acknowledging that the coronavirus pandemic that has devastated airline revenues has also shifted market demand for aeroplanes.

Chief executive David Calhoun sent a memo to employees on Thursday soliciting volunteers who would agree to leave the company with a severance package. The move, he said, “aims to reduce the need for other workforce actions”.

Mr Calhoun did not say how many volunteers the company was seeking from the 150,000-strong workforce. He said more details on which employees were eligible would be published in three or four weeks.

“It will take time for the aerospace industry to recover from the crisis,” he said. “When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different. We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come. It’s important we start adjusting to our new reality now.”

Boeing shut down plants around Seattle for two weeks because of the pandemic, which has spread widely in Washington state. The company already had been facing large cash outflows before the outbreak because of the worldwide grounding of the its workhorse jet, the 737 Max, following two fatal crashes.

The Chicago company had lobbied the US Congress for $60bn in funding, saying it needed to support its supply chain. The final $2tn stimulus bill included $17bn for companies hurt by Covid-19 and that are also important to national defence. The description fits Boeing, which is a defence contractor as well as a commercial aircraft maker.

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Mr Calhoun said the company’s first priority was to protect the health and safety of its workers. One employee has died of the virus.

“We’re also doing everything we can to protect the future of our business,” he said. “That means continuing to deliver for our commercial and services customers, even as their own businesses slow to a trickle . . . Most importantly, it means doing everything possible to keep this team intact. We can’t get back to regular operations again after the crisis if we don’t have the people and skills to make that happen.”

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