THE WALL STREET JOURNAL. ** Wednesday, September 11, 2019 |B3
that while Boeing plans to con-
tinue producing 42 of its 737
jets a month, including the
MAX, and to boost that rate to
57 next year, any slippage in the
timeline for the return of the
MAX could prompt the com-
pany to reduce output.
Most MAX operators such as
Southwest Airlines Co. don’t ex-
pect the plane to return to ser-
vice until December or January.
Some, such as Ryanair Holdings
PLC, have already cut planned
flying next summer because
they don’t expect to have suffi-
cient planes.
The company hasn’t updated
its July guidance for securing
approval for the MAX to fly
again early in the fourth quar-
ter, allowing it to resume deliv-
eries of the jet.
Rival Airbus SE, which is set
to overtake Boeing in terms of
deliveries this year, shipped 42
planes in August, taking its
year-to-date total to 500. Air-
bus has secured 95 orders so
far this year, after cancellations.
Boeing booked nine orders
last month, including two 737
business jets. It booked no MAX
deals for the sixth month in
succession, though it has 4,544
in backlog.Boeing Co. delivered 18 jet-
liners in August, leaving the
aerospace giant on track for its
lowest annual total in eight
years.
The plane maker said Tues-
day it delivered 276 planes
through August compared with
481 at the same point in 2018,
trailing analysts’ revised esti-
mates for about 500 deliveries
in 2019. It handed over 64
planes in August 2018.
Deliveries of 737 MAX jets
were halted after two of the
planes crashed, with the second
accident in March leading regu-
lators to ground the aircraft
globally. Boeing has suspended
financial guidance for the year
and warned in July that it
might slow or halt production
of the MAX if regulators don’t
approve its return to service by
the end of this year.
The MAX crisis interrupted a
multiyear aerospace boom,
prompting the cancellation of
thousands of flights, denting
airline profits and threatening
jobs in Boeing’s global supply
chain.
Chief Executive Dennis
Muilenburg said at the time
BYDOUGCAMERON
MAX Grounding
Deflates Boeing
Plane Deliveries
Thepile-upoffinishedBoeing737MAXplaneswouldpeakin
September,ifthecompanyisabletoresumedeliveriesinthe
fourthquarter.
Boeing 737 MAX planes
Sources: the company, Bernstein (estimates)
350
050100
150
200
250
300
Jan. April July Oct.UndeliveredDeliveredESTIMATESlargely the result of the hyper-
growth approach it used when
it was a startup.
“But at a certain point, big-
ger teams do not mean better
results,” Chief Executive DaraKhosrowshahi said in an inter-
nal memo about the layoffs
seen by The Wall Street Jour-
nal. “On the contrary, bigger
often means slower: slowerdecision-making, blurry lines
of authority, and a tendency to
say yes to everything rather
than doing the hard work of
prioritization.”
The company laid off a
third of its marketing depart-
ment in July.
Uber shares, which climbed
3.9% on Tuesday, are trading
about 26% below its May ini-
tial-public-offering price.
“We are not doing this for
Wall Street,” Mr. Khosrow-
shahi said in the memo that
was emailed to employees.
“It’s critical we get our edge
back and continually push our-
selves to do better.”
Last month, the company
recorded its largest-ever quar-
terly loss as it faced heavycompetition in Latin America
and elsewhere, as well as big
expenses related to its IPO and
slowing growth in its core
rides business, which it contin-
ues to subsidize. Uber has told
investors it expects losses to
start narrowing.
Another threat to Uber’s
bottom line is a California bill
that would force Uber and
similar gig-economy compa-
nies to classify drivers as em-
ployees, rather than indepen-
dent contractors, and adding
costs of minimum wage and
workers’ compensation.
The bill has passed the
state assembly, but not the
state senate, and Gov. Gavin
Newsom has said he would
sign it.Uber Technologies Inc. cut
435 technical employees in the
company’s latest downsizing
as it faces market pressures to
turn a profit and the possibil-
ity of higher driver pay.
The company laid off 170
employees in the company’s
product division and 265 engi-
neering employees, or about
8% of those divisions’ com-
bined workforce, according to a
statement from an Uber repre-
sentative. Most of the layoffs—
about 85%—affect employees
in the U.S., the company said.
The ride-hailing giant has
more than 27,000 full-time
employees around the world,BYHEATHERSOMERVILLE
ANDMARKMAURERUber Slashes Hundreds of Technical Jobs
General Electric Co. is
giving up majority control of
Baker Hughes , selling shares
in the oil-field services firm
that will raise about $3 bil-
lion but trigger a more than
$7 billion accounting charge.
GE executives have said
they planned to wind down
their stake in the business,
which GE acquired when it
merged its struggling oil and
gas division with Baker
Hughes in a 2017 deal.
The combination created a
new public company that was
62.5% owned by GE.
GE has been selling its
stake to both exit from the
business and raise cash to
pay down its debt load.
Last year, GE sold a $4 bil-
lion stake and recorded a
$2.2 billion loss on the trans-
action, which reduced its
ownership from 62.5% to
50.2%.
Based on the current share
price of Baker Hughes, GE
could bring in about $2.9 bil-
lion from the latest sale. With
a 105 million-share secondary
offering and a $250 million
stock buyback by Baker
Hughes, GE’s stake will fallbelow 40%.
GE will no longer include
the financial results of Baker
Hughes with its own and will
have to take an accounting
charge estimated to be $7.4
billion as of July 24. The final
proceeds and size of the
charge will depend on the of-fering’s pricing.
The charge is necessary
because the market value of
the Baker Hughes stake has
dropped compared with how
GE was carrying it.
GE’s stake was worth
about $12.5 billion at Tues-
day’s closing price.Baker Hughes shares
closed Tuesday at $24.11; two
years ago the stock traded at
almost $37. The stock fell
nearly 4% in late trading.
A GE spokeswoman
pointed to Baker Hughes’s
regulatory filing and prior
public comments.About 8% of the
combined product
and engineering
workforce is laid off.BUSINESS NEWS
BYTHOMASGRYTAGECutsBakerHughesStake
A Baker Hughes exhibit at a technology show. GE seeks to exit from the business.AARON M. SPRECHER/BLOOMBERG NEWSIf you find yourself in a situation you never thought
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In honor of our colleagues, friends and loved ones
lost on September 11, 2001s