Boeing plans to lay off 17,000 employees as financial difficulties worsen

Boeing plans to lay off 17,000 employees as financial difficulties worsen

Boeing plans to lay off 17,000 employees as financial difficulties worsen

Picture: On September 15, workers at Boeing’s Renton factory in Washington state went on strike. \Reuters

[Ta Kung Pao News]According to Reuters: Affected by a large-scale strike by workers, U.S. aircraft manufacturer Boeing said on the 11th that it will suffer a large loss in the third quarter. The company plans to lay off 17,000 people and put its 777X jets into operation for the first time. Delivery is delayed by one year.

33,000 workers at Boeing’s West Coast factory in the United States have been on strike since September 13, refusing to accept the company’s offer of a 25% salary increase. Negotiations between the International Association of Machinists and Aerospace Workers (IAM), which represents Boeing employees, and the employer broke down for the third time, and the two sides are still in a stalemate.

Boeing CEO Ortberg said in a letter to employees on the 11th that the month-long strike wave at Boeing has disrupted the production of Boeing 737 Max, 767 and 777 jets, and the company suffered a record loss in the third quarter. of US$5 billion. Ortberg said that due to financial difficulties, Boeing plans to reduce its global workforce by about 10% to maintain competitiveness. Ortberg also revealed that due to challenges such as development, flight test suspensions and work stoppages, the 777X is expected to be delayed until 2026 for first delivery.

Analysts at ratings agency Standard & Poor’s said the strike would cost Boeing at least US$1 billion a month and would not rule out lowering Boeing’s bond rating to “junk” status. Boeing currently has debts of approximately US$60 billion, and operating cash flow losses in the first half of 2024 exceeded US$7 billion.

In addition, the continued shortage of aircraft parts is affecting the global aviation industry. British Airways said on the 11th that due to delays in the delivery of Rolls-Royce engines and parts, especially the Trent 1000 engine for its 787 jets, the company is experiencing a shortage of aircraft. Hundreds of long-haul flights are planned to be canceled from the winter flight schedule. The company has also been using its spare fleet of Boeing 777 aircraft to avoid flight cancellations, but using these older aircraft in large numbers requires ample downtime and routine maintenance. British Airways said it would postpone the launch of a new route from London Heathrow to Kuala Lumpur and suspend one daily flight between London Gatwick Airport and New York, as well as London Heathrow Airport and Doha.

source: china