Financially troubled Boeing will cut around 17,000 jobs worldwide

Boeing on Friday announced a 10% reduction in its global workforce in the coming months, affecting about 17,000 jobs, as well as a series of actions affecting its aircraft catalog as it tries to overcome financial difficulties.

In two separate messages, the plane maker announced Friday that it is further postponing deliveries of its new 777X wide-body aircraft and ending production of the 767 freighter in 2027.

He also warned that his third-quarter results would be weighed down by heavy costs due to a strike by more than 33,000 workers since mid-September.

In electronic trading after the close on the New York Stock Exchange, Boeing shares fell 1.47%. ended the session up 3 percent.

The staff cuts will affect all categories — management, management, employees — two months into the message Boeing boss Kelly Ortberg sent to the group's 170,000 employees.

He added that details would be provided by line managers next week, indicating that the partial furlough measures that had been in place since September 20 had been suspended to protect the group's cash flow during the strike.

They concern all categories of personnel – except strikers – and in rotation, affect many tens of thousands of people. They were part of a larger austerity program during the walkout.

A strike by IAM machinists union members in the Seattle area (Northwest) has, among other things, completely shut down the group's two main factories: Renton, which produces the 737, its best-selling aircraft, and Everett. , which manufactures the 777, 767 as well as several military programs.

Ratings agency Standard & Poor's estimated Tuesday that the strike is costing Boeing $1 billion a month.

Futile discussions

Only the 787 Dreamliner is still in production, as workers at the factory in South Carolina (Eastern) are not unionized.

Several months of negotiations, including federal arbitration, have not allowed the union and Boeing to agree on a new four-year social contract.

When asked by AFP, the IAM did not immediately respond.

“Our company is in a difficult position,” Kelly Ortberg said in her message.

According to him, “repositioning the group requires difficult decisions and structural changes to ensure we remain competitive and serve our customers in the long run”.

Boeing needs to “focus [ses] Resources” on its fundamentals, Mr. Ortberg announced.

According to a press release accompanying his message, the first delivery of the 777-9 should be in 2026 (instead of 2025) and the 777-8 in 2028. They are initially scheduled to enter service in 2020.

The group plans to deliver the 767 freighters it has ordered so far, but will cease commercial production in 2027. However, it will continue to produce versions for the KC-46A military refueling aircraft.

The planemaker is also warning that its third-quarter results, scheduled for publication on October 23, will show several billion dollars in cost cuts.

“Our business is facing short-term challenges and we are making important strategic decisions for our future,” said Mr. Ortberg noted, “He has a clear vision of what we need to do to revive the group.”

The Department of Commercial Aviation (BCA) is expected to record a pre-tax charge of $3 billion under the 777X (2.6 billion) and 767 (400 million) programs. Its quarterly revenue is expected to reach $7.4 billion with an operating margin of -54%.

This charge stems from the suspension of the 777X certification process as well as, for both programs, the consequences of the strike.

The Defense, Space and Security (BDS) branch will once again be identified with a charge linked to several fixed cost programs of nearly $2 billion. Turnover should come in at $5.5 billion and operating margin at -43.1%.

At the group level, sales were $17.8 billion and net loss was estimated at $9.97 per share.

Boeing has been going through a tough time, marked by product quality issues for months, culminating in an incident involving an Alaska Airlines 737 MAX 9 in early January.

The aircraft manufacturer is closely monitored by the FAA regulator and has been the subject of numerous investigations (Parliament, Federal Police).