OEM is cutting costs, aligning employment levels to match current business and market requirements
- Machinists, engineers, technicians
- Attrition, unfilled openings, voluntary and involuntary layoffs
- Another 8% reduction?
Boeing will cut the production rate for its 777 program from seven jets per month to five in August, which is likely to reduce its employment needs at assembly operations in Washington.
About 1,800 Boeing Commercial Airplanes employees have accepted voluntary buyouts since the OEM announced its aggressive workforce-downsizing plan in December. According to local reports, through February Boeing has drawn 1,805 voluntary buyouts from engineers and machinists, with 1,500 of those being workers represented by the International Association of Machinists. The other 305 volunteers are engineers and technicians represented by the Society of Professional Engineering Employees in Aerospace.
Boeing began offering buyouts to workers in January.
In December, Boeing executives notified employees that the division would continue reducing employment levels during 2017. In that memo, distributed internally, Conner and McAllister explained that “fewer sales opportunities and tough competition” require the OEM to pursue further employment reductions in 2017.
“We will continue working aggressively across BCA to reduce non-labor costs,” Boeing vice chairman Ray Conner and Commercial Airplanes CEO Kevin McAllister added.
Boeing Commercial Airplanes’ official position is that it is cutting costs and aligning employment levels to its business and market requirements. This refers to the declining rate of new commercial aircraft orders, in particular the wide-body 777 aircraft, which are assembled at two plants in Washington State. Boeing has reduced its production rate for the 777, which is scheduled to be replaced by the new 777X in 2020. Boeing delivered 99 of 777s last year, but is due to deliver 85 this year and as few as 66 in 2018.
Boeing’s other high-volume programs — the 737 and 787 Dreamliner — have much larger volumes of unfilled orders. Boeing has just over 71,000 employees at manufacturing plants in Everett and Renton, Wash. And, as for the 787, which is assembled both in Washington and in South Carolina, workers there handily rejected an effort to unionize in an election last month.
The December memo acknowledged that the Boeing Commericial Airplanes workforce had been reduced by over 8% during 2016, including a 10% reduction in executive and management positions. In numerical terms, the group reduced employment by more than 6,600 jobs during 2016.
Boeing has not stated how many jobs it seeks to cut this year, though a union representative has said that the company indicated the number would roughly equal the total for 2016 layoffs.
"Employment reductions will come through a combination of attrition, leaving open positions unfilled, voluntary layoff program, and in some cases involuntary layoffs," according to a Boeing spokesman.