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S108 3x.BY AARON GREGGBoeing has started offering
buyouts to its employees in a
move to stave off deeper work-
force cuts, the latest in a number
of drastic moves to contain the
financial damage caused by the
novel coronavirus pandemic.
Details of the “voluntary lay-
off” plan — including who might
be eligible, how many jobs will be
cut and specifics of the buyout
packages — will be provided with-
in three or four weeks, employees
were told Thursday.
The Chicago-based aerospace
giant’s resilience has been severe-
ly tested by a multipronged crisis.
For more than a year, the compa-
ny has been working to revive its
flagship commercial jet, the 737
Max, after equipment flaws were
linked to two crashes that killed
hundreds of people.
More recently, the pandemic
has slashed demand for Boeing’s
passenger jets as airlines across
the globe effectively grind to a
halt. Boeing’s problems are com-
pounded by the fact that the
Seattle area, the center of its
global manufacturing operations,
is also a covid-19 hot spot.
Chief executive Dave Calhoun
said in a letter to Boeing employ-
ees that the buyouts aim to “re-
duce the need for other workforce
actions,” probably alluding t o pos-
sible layoffs.
He offered a blunt assessment
of the company’s post-crisis pros-
pects, suggesting that the market
for its products could change
dramatically.
“One thing is already clear: It
will take time for the aerospace
industry to recover from the cri-
sis,” Calhoun wrote. “When the
world emerges from the pandem-
ic, the size of the commercial
market and the types of products
and services our customers want
and need will likely be different.”
He said it could take years for
the industry to come back fully.
“We will need to balance the
supply and demand accordingly
as the industry goes through the
recovery process for years to
come,” Calhoun added.
The buyouts are the latest
move to contain the financial
damage. In mid-March, Boeing
drew down the full amount of a
$13.8 billion loan meant to cover
costs related to the ongoing
grounding of the 737 Max. It also
halted hires companywide.
The company on March 23
stopped production a ctivity in t he
Puget Sound region for two
weeks, affecting about 70,000 em-
ployees. The production halt
largely was intended to contain a
coronavirus outbreak at Boeing’s
own Everett, Wash., factory,
where an employee who contract-
ed the virus is reported to have
died.
As of Thursday, the company
had about 100 cases across its
global workforce of 160,000 peo-
ple, a company spokesman said.
About half of the confirmed cases
were in Washington state.
Executives say they are doing
what they can to respond.
“Diligently tracking and trans-
parently sharing information
with our workforce is a critical
part of our efforts to slow the
spread and protect our employees
and communities,” said Bradley
Akubuiro, a Boeing spokesman.
Even before the pandemic,
Boeing was hitting financial lows
never before seen in its 103-year
history. It finished 2019 with
$76.5 billion in annual revenue, a
24 p ercent drop from the p revious
year.
Boeing’s commercial aircraft
division once considered a cash
cow that allowed it to outbid
competitors for major military
deals, c ould soon make less mon-
ey than the Arlington-based de-
fense division, which has histori-
cally accounted for a smaller por-
tion of its revenue. The commer-cial division made $32 billion last
year; the defense side, $26 billion.
In an apparent response to the
public health crisis, the company
has closed several factories that
produce aircraft for the Defense
Department. Among other
S eattle-area factories closed re-
cently, Boeing sent home employ-
ees who were working on the
KC-46 aerial refueling jet and the
P-8 Poseidon surveillance plane.
Late Thursday, it halted produc-
tion at Pennsylvania f actories t hat
produce the H-47 Chinook heli-
copter and the V-22 Osprey tilt -
rotor aircraft.
Boeing was alone among the
major defense contractors in
shutting down defense facilities.
The Pentagon has declared the
defense work essential and has-
tened the delivery of cash across
the defense industrial base.
In television interviews last
week, Calhoun insisted that Boe-
ing had private financing options
that could help sustain it. But
analysts increasingly think the
company could face bankruptcy,
mass layoffs or both if public
funding is not provided.
A Boeing official, speaking on
the condition of anonymity to
discuss internal deliberations,said the company will work with
the Treasury Department to “de-
termine the best path forward for
our workforce and our business”
once the department establishes
eligibility requirements.
Boeing h as s aid there should be
at least $60 billion in “public and
private liquidity, including loan
guarantees,” f or the broader aero-
space manufacturing industry.
The recently approved $2 tril-lion federal aid package quietly
carved out a $17 billion fund for
businesses deemed “critical to
maintaining the national securi-
ty.” Although the provision does
not mention Boeing by name, it
was inserted into the bill largely
for Boeing’s benefit, according to
people who were involved in the
deliberations.
In the letter Tuesday, Calhoun
said Boeing would still deliver onits existing commercial and de-
fense orders. He also pledged to
be honest and transparent with
employees.
“I can’t predict with certainty
what the next few months will
bring, but I can commit to being
honest about what’s happening
and doing everything we can to
protect our people and our busi-
ness through t his crisis,” he wrote.
[email protected]Boeing tries employee buyouts to arrest financial slide
david ryder/reuters
A worker leaves a Boeing facility in Everett, Wash., last month. Boeing stopped production in the Puget Sound region for two weeks starting March 2 3, affecting about 70,
employees. The halt largely was intended to contain a coronavirus outbreak at the Everett factory, where an employee who contracted the virus is reported to have died.Chief executive’s letter
says it could take years
for industry to recoverFinance
Business Executives for
National Security of the District
appointed Chad Maske senior
vice president for policy and
projects.
law and lobbying
Axinn of the District
appointed Craig Minerva
counsel in the firm’s antitrust
group.
Bradley Arant Boult &
Cummings of the District
appointed Nathaniel Greeson
associate in the firm’s
government contracts practice
group.
Hogan Lovells of the District
appointed Kelly Ann Shawpartner.
Latham & Watkins of the
District appointed Nick Boyle
member of the firm’s complex
commercial litigation practice.send information about promotions,
appointments and personnel moves
in the Washington region to
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