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Boeing will send layoff notices to thousands of its employees within the coming weeks and a senior US official has flown to Seattle to encourage negotiations between the planemaker and the union, according to a report.
Boeing will next month send 60-day notices to thousands of workers, including employees in its commercial aviation division, a source familiar with the matter told Reuters. Those laid-off staffers will be booted out in mid-January, the source said.
The aircraft-maker — which said Friday it plans to slash 17,000 jobs and take $5 billion in charges — may send a second phase of notices in December, the source said.
Reports of the layoff notices come after Boeing CEO Kelly Ortberg last week announced the company would be cutting 10% of its workforce.
A spokesperson for the Society of Professional Engineering Employees in Aerospace said the company told the union on Monday that it would issue 60-day notices to its members on Nov. 15.
Boeing declined to comment on whether it will be sending 60-day notices out anytime soon.
“We remain committed to finding a resolution to end the strike,” Boeing told The Post in a statement. “We will work with the union when they are ready to bargain an agreement that recognizes our employees and preserves our company’s future.”
Meanwhile, acting US Labor Secretary Julie Su flew to Seattle – the site of the Boeing Everett Factory – days after the company unveiled the layoff plans.
“Acting Secretary Su is meeting with both parties today to assess the situation and encourage both parties to move forward in the bargaining process,” a Department of Labor spokesperson said on Monday.
Su has previously spoken with Boeing and the union, but this is her first time speaking to both sides of the bargaining at the same time.
The International Association of Machinists and Aerospace Workers (IAM) said its lead negotiator, Jon Holden, had updated Su on the talks and stressed the union’s commitment to a contract “that values our members’ skills and dedication.”
The strike recently hit one month after 33,000 workers walked off the job on Sept. 13 in pursuit of 40% wage hikes over four years.
A Boeing spokesperson said the company had shared information with managers that included plans to cut jobs. The striking IAM employees were not currently affected, the spokesperson said.
IAM International President Brian Bryant called the job cuts “corporate greed at its worst.”
“Boeing just turned its back on 17,000 of its own workers – the same people who carried Boeing through crisis after crisis, year after year,” he said in a statement.
Boeing shares dropped 1.3% on Monday after the after-hours job cut reveal on Friday, which also announced delays to the 777X jetliner and the ending of civil 767 freighter production.
The company’s shares rose 1.4% on Tuesday.
Boeing will not ask for voluntary departures so it can save on severance and avoid losing too many skilled workers, a source told Reuters.
“The trick will be not losing the 10% of people you want to keep, which is even more important than usual in the post pandemic skill shortage environment,” said Agency Partners analyst Nick Cunningham.
Boeing had been hiring more workers to handle increased output – but its production efforts were sidelined after the Alaska Airlines door plug disaster in January.
The blown-out door plug led to significant reputation damage and increased regulatory scrutiny on the planemaker.
The company’s stock has cratered 39.8% so far this year and has fallen back on its deliveries.
Boeing pushed its 777X production back a year to 2026 – totaling a six-year lag on the jet deliveries.
Emirates Airline is one of Boeing’s largest widebody customers.
“We will be having a serious conversation with them over the next couple of months,” Emirates Airline President Tim Clark said in a statement. “I fail to see how Boeing can make any meaningful forecasts of delivery dates.”
Industry leaders are reportedly sharing concerns that Boeing may go under – unable to bounce back from significant reputation losses following the door plug incident and fatal plane crashes in 2018 and 2019.
“Unless the company is able to raise funds through a rights issue, I see an imminent investment downgrade with Chapter 11 looming on the horizon,” Clark told The Air Current.
Boeing has more than $10 billion of gross cash, which will likely ease some concerns. But the company still needs to raise money by the end of the year to pacify concerned investors and analysts.
Most analysts expect Boeing will raise up to $15 billion through a share issue.
Global ratings agency S&P has estimated the planemaker is losing more than $1 billion a month.
The agency placed the company’s rating on CreditWatch negative as a warning it may downgrade Boeing’s investment-grade credit rating.
With Post wires
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