Boeing to cut jobs in commercial airline unit

Feb 10, 2016, 5:21 PM EST
Source: Prayitno/flickr

Boeing will cut jobs in its commercial airline unit to save in its competition with Airbus.

Reuters reports:

The decision was announced by Boeing Commercial Airplanes Chief Executive Ray Conner in an employee webcast after the company, the world's biggest aircraft maker, saw sales fall and profit margins narrow last year. Airbus won 57 percent of new aircraft orders booked by the two airplane makers in 2015. Boeing's narrow profit margin resulted from, among other things, the continuing high cost of producing its state of the art 787 Dreamliner and a charge it took to account for slowing sales of its 747 jumbo.

"To win in the market, fund our growth and operate as a healthy business, we are taking thoughtful steps to reduce the cost of designing and building our airplanes, part of which involves evaluating our employment levels across all of commercial airplanes," Boeing said. "We will start reducing employment levels beginning with executives and managers first." The company did not provide a timeframe for the job reductions or an overall target for cuts. It said the number of cuts "will depend on how effectively we bring down costs as a whole."

The Seattle Times writes:

The gloomy announcement came on the same day that leading aviation expert Richard Aboulafia, speaking at a conference in Lynnwood, expressed concern over the sustainability of the long-running airplane industry boom and skepticism that Boeing will reach the high production rates it’s already announced. Last week, Boeing approached the International Association of Machinists (IAM) union to discuss a voluntary layoff program. The union was not given specific information about impending layoffs at that time, and on Wednesday union spokesman Bryan Corliss said the company had still provided no details.