Boeing lays off 17,000 employees, postpones new 777X jet
Safety scandals and a recent strike are taking their toll on Boeing. The aircraft manufacturer has also miscalculated.
(Image: Trevor Mogg/ Shutterstock.com)
"Our business is in a difficult situation," says Boeing's new President and CEO Kelly Ortberg. The challenges can hardly be overestimated. His recipe: the workforce will be reduced by around a tenth "over the next few months". In addition to ordinary employees, the job cuts will also affect managers and even senior executives.
In addition, Ortberg is also adjusting the development program for the new 777X long-haul jet; while the first delivery was originally planned for 2020, he is now aiming for 2026. Boeing had to stop test flights following damage to a 777X prototype.
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The construction of Boeing 767 freighters will not be extended beyond 2027. This is no great surprise; due to stricter regulations for noise and exhaust fumes, 767 freighters approved after 2027 would probably only have been allowed to fly in the United States of America. Ortberg only wants to continue building the KC-46A tanker version, according to his circular to his own staff; this flying refueling station allows other military aircraft to refuel in the air. The main customers are the US military, but the Japanese and Israeli armed forces have also ordered single-digit quantities.
A two-decade problem
Safety issues have impacted Boeing's business since the crash of two 737 Max 8 aircraft in October 2018 and March 2019; it was only five years after the (arguably avoidable) accidents that Boeing pleaded guilty to the crime of conspiracy to commit criminal fraud. This move was unavoidable after a virtually new Boeing 737 Max 9 lost a door cover during flight earlier this year.
In addition, the company has suffered considerable losses on aerospace and military contracts. The company concluded fixed-price contracts and made huge miscalculations. The financial situation has been exacerbated for a month by the strike of 33,000 employees who are demanding higher salaries. Civilian products derived from military projects are suffering in particular. The workers have rejected two offers of pay rises as inadequate; meanwhile the strike is draining the aerospace company's capital reserves. Boeing has a "two-decade problem", as Scott Kirby, CEO of Boeing's major customer United Airlines, put it in March
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