Affected by the pandemic, Boeing cuts 10% of its workforce - France 24

New York (AFP)

Boeing confirmed on Wednesday that it will reduce its global workforce by about 10% and cut production of its long-haul planes to save money, due to the coronavirus pandemic which is decimating air transport and aircraft orders.

These job cuts, which have already started, will be done through a voluntary redundancy program and dry layoffs. They mainly concern the civil aviation division, whose workforce will be reduced by 15%, said general manager David Calhoun, in an internal letter to employees on the sidelines of the publication of first quarter results.

In mid-April, sources familiar with the matter had told AFP that this austerity measure could affect at least 7,000 employees, Boeing employing 70,000 people in Washington state, in the northwest of the United States, where find most of its civil aircraft factories. It has an 787 assembly site in South Carolina.

- "Unexpected" -

Boeing, which also produces military and space equipment and employs some 160,000 people around the world, did not give a precise figure.

"The marked reduction in demand for our products and services for the next few years simply cannot support the high levels of our production", explains David Calhoun, in the letter consulted by AFP.

He added that the aircraft manufacturer faced "completely unexpected challenges".

Boeing was already in crisis before the Covid-19: the immobilization on the ground on March 13, 2019 of the 737 MAX, its star plane, after two close accidents that killed 346 people, had already greatly reduced its revenues, inflated its debt and caused its first annual loss in two decades.

The aircraft manufacturer is the subject of a criminal investigation by the United States Department of Justice and a slew of complaints from families of victims.

Travel restriction, social distancing and containment measures to stem the spread of Covid-19 have exacerbated the situation.

They have in fact reduced air traffic by more than 95% in the United States, according to Mr. Calhoun, while the revenues of airline companies in the world should fall by 314 billion dollars this year.

Boeing had to temporarily close its American factories and has just reopened them, but the recovery in activity will be gradual.

In addition to the job cuts, the aircraft manufacturer will also, like its rival Airbus, reduce the production rates of its long-haul flights to adapt to the new aerial landscape.

It will only produce ten 787 aircraft per month until 2021, compared to 14 at the start of the year, and will drop to seven units in 2022.

Production of the 777 and its replacement 777X will drop from five aircraft per month to three in 2021.

That of the 737 MAX, suspended since January, will resume at "low rates" when it is put back into service in 2020 and will be established at 31 aircraft per month in 2021. Before its immobilization, Boeing produced 52 units per month.

Boeing insists on the return to the sky of the MAX mid-2020, but the pandemic should push it back at least at the end of the summer, industrial sources told AFP. Deliveries are expected to resume in the third quarter, said David Calhoun on Wednesday.

- State aid ? -

The setbacks of the MAX and the health crisis plunged Boeing into the red in the first quarter, with a net loss of $ 641 million.

Revenues fell 26.2% year on year to $ 16.91 billion, weighed down by a drop of about a third in civil aircraft deliveries.

Debt jumped from $ 27.3 billion at December 31 to $ 38.9 billion at the end of March.

"Boeing is confident that it can obtain sufficient liquidity to finance its operations," said the manufacturer of Air Force One, the US presidential plane.

Boeing has asked for at least $ 60 billion in government assistance for itself and its 17,000 contractors, but does not say whether it intends to apply for the $ 17 billion promised to national security firms in the plan. federal aid.

If discussions with the Treasury should start soon, according to sources familiar with the matter, Mr. Calhoun has already warned that an entry by the federal state into capital was a red line not to be crossed.

© 2020 AFP