Senior United States officials intervened, Boeing laid off 17,000 people worldwide, who will be cut?

Julie Su, acting labor secretary of United States, has personally flown to Seattle to try to ease the general strike of Boeing workers.

More than a year on, Boeing has been facing turmoil, and the new Boeing chief executive, Kelly · Altberg, has failed to alleviate it.

Since Sept. 13, about 33,000 Boeing workers have gone on strike, demanding a 40 percent wage increase, but Boeing has refused. As the strike enters its fifth week, Boeing recently announced layoffs of about 10% of its current workforce, involving about 17,000 jobs, and will also delay the launch of the new large 777X airliner until 2026. A union and industry source said thousands of Boeing employees would receive notice of layoffs within weeks.

Liu Zhi, associate professor and doctoral supervisor of the Department of Organization and Strategic Management of Guanghua School of Management of Peking University, told the first financial reporter that (Boeing's) problems are all systemic problems, not accidental events, and it is difficult to eliminate them without a systematic plan; There is a systematic plan, and it takes time for it to take effect; Often, organizations change when they have problems, but before or during the change, they experience a period of "worse" or chaos than the problem period...... "Buildings don't collapse in a day, and they don't build in a day. ”

Boeing layoffs amid a stalemate in labor negotiations

While Suvis had previously spoken to Boeing and the striking Boeing West Coast factory workers' union, this was the first time she had met in person in Seattle.

The International Association of Mechanics and Aerospace Workers (IAM) said its chief negotiator, Jon Holden, has updated Suvis on the current negotiations, "emphasizing the union's commitment to negotiating a contract that values the skills and dedication of our members."

As mentioned earlier, 33,000 Boeing employees have been on strike since September 13, and labor negotiations are deadlocked. Boeing then announced global layoffs.

In a recent internal memo, Altberg reminded employees to be "sober" about the company's difficulties in getting out of trouble, suggesting that the company may take more drastic measures to improve the situation and invest more resources in the commercial aircraft business.

According to Xinhua News Agency, citing foreign media, Altberg's statement shows that under his management, Boeing may increase investment in its most well-known civil aircraft business. In the longer term, Boeing may need to overhaul its profit-struggling segments.

Currently, Boeing has three business units: Civil Aircraft Group, Defence, Space & Security Group and Global Services Group. After Altberg took office in early August, the first major personnel change was the dismissal of then-CEO Colbert of the Defence, Space & Security Group, on September 20.

According to media reports, a source familiar with the matter said that Boeing will issue a 60-day notice to thousands of workers next month, including many employees in the commercial aviation division, meaning those employees will leave the company in mid-January next year. The second phase of notifications could be rolled out in December if needed, the source said. IAM, which represents Boeing engineers, also said Boeing informed the union that it would give its members a 60-day notice on Nov. 15.

A Boeing spokesperson said the company had shared information with managers, including a plan to cut 10 percent of its workforce in the commercial sector, involving both unionized and non-union workers. Altberg previously said the layoffs would include executives, managers and employees.

Typically, "executives" in a Boeing organization include the Director level in management, not just the C-level or officer level. However, Boeing has not disclosed information about which divisions will be laid off or the number of layoffs in each division. Of the three divisions of Boeing described above, Boeing Civil Airplanes has the largest number of employees.

Previously, Boeing hired a total of 23,000 employees in 2023, and about 3% of employees quit their jobs that year. Notably, Boeing's workforce has increased dramatically in 2023 compared to 2022, when Boeing and the world were just emerging from pandemic restrictions, when Boeing estimated that after a pandemic, a 21-month grounding of the 737 MAX and a 20-month suspension of deliveries of the 787, Boeing's productivity would return to normal. During the pandemic, the productivity of the 787 plummeted to just 0.5 aircraft per month.

Unexpectedly, the ensuing series of safety issues and the ensuing case investigation and commander Boeing have not been able to restore production to 2019 levels. The result is overstaffing.

According to media reports, a source said that Boeing will refrain from requiring employees to voluntarily leave their jobs in order to limit cash for severance pay and avoid the outflow of technical personnel. Competitors are snatching up scarce labor to ease the pressure on the aviation supply chain.

In view of the current level of layoffs, Liu Zhi told the first financial reporter that United States large companies are laying off employees, and they have to compare the layoffs of enterprises in the same industry and size (such as Amazon) to judge whether the other party's layoff ratio is too high.

Boeing's stock price fell and its rating was worrying

Boeing announced layoffs after market hours on the 11th. After the U.S. stock market opened on Monday (14th), Boeing's share price fell 1.3% to close at $148.99.

Nick Cunningham, an analyst at Agency Partners, said the trick is not to lose the 10% you want to stay, which is more important than ever in a post-pandemic environment of skills shortages.

At present, Boeing's announcement of a one-year delay in the delivery of the 777 X to 2026 is widely expected in the industry, and the 777 series is Boeing's largest wide-body passenger aircraft in production. In fact, deliveries of the 777 X aircraft have been repeatedly postponed and are already about 6 years behind schedule.

U.A.E. Airlines President Tim Clark became the first industry veteran to voice concerns about Boeing's ability to respond to its worst crisis in its history, which some industry leaders have whispered privately in recent weeks.

In a statement, Clark said: "We will have serious conversations with them (Boeing) in the coming months. I don't think Boeing can make any meaningful predictions about the delivery date. ”

Clark also told an industry magazine that unless the company can raise capital through a rights issue, "I think the investment rating is about to be downgraded, and bankruptcy protection is imminent." ”

U.A.E. is the largest user of the Boeing 777 jet family, which is the workhorse of long-haul transport.

Currently, Boeing's total cash is just over $10 billion, a highly regarded level that analysts say will ease some of the recent pressures, while warning that the company still needs to raise capital by the end of the year.

Most analysts expect Boeing to raise up to $15 billion through a stock issue.

According to the FAA, the United States' civil aviation regulator, it may take more than months but years for Boeing to return to stability. Ratings agency Standard & Poor's has warned that Boeing risks losing its prized investment-grade credit rating.

Yves Doz, a professor of global technology and innovation at INSEAD, who has studied Boeing for many years, told CBN reporters that "the civil airliner market has been very cyclical for decades. Fluctuations in demand create peaks and troughs in engineering and production demand. Over time, the new cost-conscious new Boeing is increasingly taking measures to lay off employees when demand decreases. Many experienced workers and engineers were laid off, but when demand picked up, Boeing found that they could no longer be hired. As a result, Boeing has increasingly relied on partners and subcontractors to make up for technical shortcomings, but has lost practical experience and ability to actually design and build aircraft, Donce said.

He argues that Boeing has lost some of its deep industrial competitiveness by focusing on system integration and final assembly as it has become more reliant on partners. In the face of increasing competition with rival Airbus, Boeing turned to composite materials, making the transition more difficult while also imposing a cost-saving culture on itself. Poor corporate governance, a full order book, and an irrational and informative board of directors make it impossible to realistically perceive and assess the dangers facing Boeing.

Facing the "rectification" ahead, Dons said the biggest challenge for the company was how to overcome the quality control issues that arose from the complexity and fragmentation of its supply system.

(This article is from Yicai)