Boeing's new 737-MAX/
image courtesy of Boeing

Boeing May Cut Up to
8,000 Airplane Jobs

| published March 31, 2016 |

By Keith H. Roberts, Thursday Review contributor

The giant Chicago-headquartered Boeing, an aerospace, aviation and technology company, says it plans to slash up to 8,000 jobs during 2016, a cost-cutting measure meant to help it in its fierce fight with competitors, including its closest rival, Airbus.

Despite a recent boom in business as the company celebrates its 100th year, Boeing says that it must find at least $1 billion in savings by this time next year, and the layoffs will be fundamental to those cost-cutting measures.

Although Boeing has not settled on an exact number of cuts, industry experts and insiders say that the 8,000 figure is fairly close to the cuts that Boeing will have to make in order to achieve its crash-plan to save $1 billion. In addition, some analysts say that the Boeing numbers-crunchers want to cut approximately 10% of its employee base in its commercial airplane and airliner division, which currently employs about 80,000.

Boeing has officially confirmed about 4,000 jobs will be cut over the next few months, with more to follow after the summer. A small segment of the cuts will come by way of leaving vacant or unfilled positions empty.

Boeing stock took a hit on Wednesday upon word of the jobs cuts; its value fell almost 2%, with shares dipping to $128.58 at the end of the day.

Unions are not happy about the decision, and some of its membership is worried that the jobs will not come back. There are also fears, which Boeing has tried to quell, that the iconic American company might be in the early stages of moving some operations overseas.

Union officials say that the company has not entered into any conversations with the union about the depth or the scope of the cuts, nor has it fully braced employees for what may lie ahead. One of the unions, the Society of Professional Engineers, says that its members have been told that there may be options for buyouts. But that same union has reported that so far no buyouts have been offered to the workers most likely impacted by the layoffs. This has led to confusion, uncertainty and even frustration by some employees, worried that their jobs may evaporate before the end of this year.

At least one other union is still in the dark to the full extent of the Boeing layoffs.

“We have not been notified of these types of reduction numbers,” said Jon Holden, International Association of Machinist District 751 president.

But many technology and aviation industry experts point to several factors which show that the move by Boeing may be the direct result of Boeing’s rapidly-improving production processes. For one, Boeing is able to build airplanes much faster and with greater efficiency, a factor which often leads to some employee downsizing in manufacturing. Boeing—like many other aviation companies—is also adapting to technological changes and a rapidly-shifting marketplace. Boeing is reducing its 777 production but slowly ramping up production of the 737 MAX. Major transitions like this often lead to layoffs, followed sometimes by the same people being hired months or years later.

Boeing is headquartered in Chicago, Illinois, but the company’s unofficial home is Seattle, where it was founded in 1916. Aside from commercial airplanes, Boeing also makes small airplanes, satellites, rockets and rocket components, engines, and rotary-mechanical devices. Boeing is also one of the world’s largest defense contractors and developers of spacecraft and space equipment.

The proposed 2016 layoffs would not be the biggest jobs-cut action by Boeing. Immediately after World War II, as demand for new military equipment dropped off overnight—especially the B-17 and B-29 bombers—Boeing found itself without the staple of its production line. Prior to the closing weeks of the war, Boeing had made production of bombers so efficient that it was able to produce more than 350 units each month, or roughly 12 per day. When the bomber program was cancelled—or vastly scaled back—Boeing had to let go some 70,000 employees.

Related Thursday Review articles:

Kohl's To Lay-Off 1,500 Employees; Keith H. Roberts; Thursday Review; March 22, 2016.

Walmart Closing 269 Stores, Will Cut 16,000 Jobs; Thursday Review staff; Thursday Review; January 17, 2016.