Boeing to Chop 10,000 Jobs

[Shardik]

Source: Business Week

With demand for commercial jets losing altitude, Boeing (BA) reported a $56 million net loss for the fourth quarter of 2008 and said it is taking some tough steps to keep itself aloft. Will the moves pay off? It's not clear, and Boeing managers for now say they can't see well enough beyond 2009 to make a firm call. The "visibility" just isn't there from 2010 and beyond, says CEO W. James McNerney Jr.

Boeing on Jan. 28 reported surprisingly bleak results, even as its top executives forecast a modest rebound in sales this year. McNerney, citing "challenging economic times," doubled the number of jobs he plans to cut this year. Whereas Boeing on Jan. 9 said it would lop some 4,500 jobs from its commercial plane unit, McNerney hiked the figure to 10,000 on Jan. 28 and said the cuts would be spread all across Boeing's global operations, most of them in places other than the company's Seattle-area commercial-plane facilities. Such steps, amounting to a 6% trim in Boeing's workforce, are needed to preserve the company's financial strength, McNerney maintained.

For now, Boeing is sticking with plans to put its new 787 Dreamliner commercial jet into the air by June. After nearly two years of delays, the 787 remains on target, the company said. So far, only one customer has backed off on orders for the new plane, and its orders were scheduled for delivery late in the next decade. Boeing has some 895 orders on the new jet from 58 customers.

Read more: http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090128_740915.htm?chan=top+news_top+news+index+-+temp_top+story

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The decline gains another degree.

[Veritas_et_Aequitas]

1. It just keeps on coming...

[OhioChick]

2. What will be left? n/t

[Fovea]

13. Small commuter routes with turboprops

and really long trans-oceanic flights.
The rest--
Rail.

[NickB79]

20. Assuming you have the money to travel

For most of us, life is going to get much more local, much more integrated on the neighborhood and city level rather than on the state and national level.

[blueclown]

3. Ladies and gentlemen, trickle down economics at work. n/t

[MrModerate]

4. Here's what's scary . . .

Airbus is in even *worse* shape . . .

[Flagg]

9. says who ?

[MrModerate]

14. Well, these guys for one . . .

http://www.manufacturing.net/News-Airbus-2009-Orders-Drop-Below-Deliveries.aspx

Besides, their backlog is 2 years less than Boeing's, and the A380 is such a big bite for their customers that order cancellations are likely.

[Sultana]

10. WTF does Airbus have to do w/ all this?

[MrModerate]

15. The aviation industry (and travel industry, and businesses that travel) . . .

are all under stress, which means that there are more waves yet to hit in the current financial tsunami.

[Sen. Walter Sobchak]

18. Airbus isn't going to be paying penalties on 900 787's they can't deliver

Boeing is going to be hemorrhaging cash for a decade because of the 787 fiasco, every missed delivery date incurs significant financial penalties, the longer it takes to get the Rubbermaid Liner off the ground the greater the penalties over the life of the program. It will take years to catch up with the delivery schedule and stop the payouts.

Traditionally, when faced with delays airlines would work out a deal for reduced pricing on subsequent orders – but in this market the airlines are going to hold Boeing to the letter of the contract and demand cash.

Airbus is comparatively comfortable, they don't have that massive liability over their head.

[Sen. Walter Sobchak]

5. MGMT101: When you have cut your business to the point of total dysfunction...

just keep cutting. And when your rock bottom bidder "outsourcing partners" shit the bed, don't bring the work home - just call it "adjusting to the new business model"

Boeing is being reduced to a joke, how is the 787 coming guys? have you put one together without breaking it yet?

[Xipe Totec]

6. Ah, memories...

[Shardik]

8. they all moved to where I lived at the time.

All of a sudden all my Huntsville, AL neighbors were from Seattle.

[vinylsolution]

7. Boeing's decline began in the early 90's....

.... when the bean-counters gutted the R&D department in order to slash costs and keep their Wall Street masters happy.

[depakid]

11. Some of this is callous political posturing in an attempt to win the tanker contract

Boeing knows that it cannot match Northrop's bid either in terms of the proven quality and performance of the aircraft- or on the price.

They've also had a little "problem" with outsourcing overseas- and a major corruption scandal on the bill of good they tried to sell the taxpayers several years ago on this deal, that resulted in two Boeing execs and two Air Force procurement officials being sent to prison and the resignation of the Secretary of the Air Force and Boeing's CEO.

Sort of makes one question their sincerity... much as one might question the actions of the major banks....

[itsrobert]

16. You seem like an expert

Now, it is my understanding the SECAF resigned because of nuclear security issues. But maybe you have more information than I. Boeing doesn't have a track record of proven quality and performance of their aircraft? Why don't you ask UPS, who have hundreds of Boeing Aircraft that fly like clockwork from around the world with their overnight cargo? They don't seem to have a problem with their aircraft. Northrop plan is to use Air Bus. And they have a track record? Didn't AirBus deliver their latest plane over 1 year late to their first customer?

[depakid]

19. Not an expert- just followed the situation (the fiasco) for a while

Not disrespecting Boeing's commercial aircraft at all- just the tanker program, which they've been penalized by both Italy and Japan over (quite aside fr0m the other problems).

Northrop's got a more capable aircraft- at a much cheaper price. They'll create tons of jobs and build new facilities in the states- which, aside from boosting the ecoonomy, will keep one company from monopolizing the industry, preventing more one bid (or no bid) contracts.

Competition is good both companies- and for America in the long run (as is investment from sources beyond US treasury indebtedness) -so this looks to me to be a win/win in a lot of ways.

[wartrace]

12. Wow, that is horrible news.

You can't yank 10,000 jobs like that out of the economy without a LOT of pain. Here is a handy link you may find useful; http://www.layoffdaily.com/

I'm amazed at the numbers of those being laid off/terminated. I will be out of a job May 1st myself.

[excess_3]

17. welcome news

fewer jet aircraft polluting our sky

[truthisfreedom]

21. 10,000 jobs cut after a loss of $56M. That math is pretty weird.

I can't begin to guess how much each of those employees was paid, but $56M/10000 is $5600 each. I guess they're expecting a lot more bad news. A LOT more.