Shaken by the pandemic and the MAX, Boeing cuts 30,000 jobs in 2 years

Boeing will further cut its workforce to ultimately cut 30,000 jobs in two years, in response to the setbacks of the 737 MAX and the coronavirus pandemic which has affected air transport.

The American manufacturer warned Wednesday that he expected, in addition to retirements, to have to part with 7,000 additional employees by the end of 2021. He did not give details on the factories, programs or on the geographic areas that will be affected.

Boeing had already announced in the spring, just after the start of the large-scale spread of Covid-19, a 10% reduction in its workforce, which had resulted in the dismissal of 19,000 employees.

And Dave Calhoun, the CEO, warned in July that further cuts were to be expected.

“Since the pandemic broke out at the start of the year, we have increased our liquidity, reduced expenses, simplified hierarchical structures and considerably lowered production rates for commercial aircraft,” Calhoun recalled in a letter. to employees.

The group has also changed its organization, its investments and its supply chain.

Despite everything, the company’s results remained in the red in the third quarter: Boeing saw its revenue decline 29% and suffered a net loss of $ 449 million.

Its financial situation remains complicated: the manufacturer still burned 4.8 billion in cash over the period and its debt stood at 61 billion dollars, against 25 billion in 2019 at the same time.

“There is no doubt that the second wave (of Covid-19) which hits the United States and Europe is weighing heavily”, noted Mr. Calhoun on the CNBC channel.

Airlines initially thought that traffic would rebound at the end of the year to 40% or 50% of what it was in 2019. “I think we will be closer to 30% to 35%,” said the official. .

He said in a conference call to expect a return to 2019 levels “in three years”, in 2023.

– Facing Airbus –

While waiting for a rebound, order cancellations are on the rise and the manufacturer only delivered 28 commercial devices during the quarter.

Revenues for its commercial aviation division fell 55% to $ 3.6 billion.

Boeing faced another setback in the quarter with the identification of manufacturing defects on the long-haul 787 “Dreamliner”, which delayed deliveries.

And the group is still waiting for the green light from the authorities to fly its flagship aircraft, the 737 MAX, grounded since March 2019 after two accidents that killed 346 people.

There are still several steps to be taken before the US Aviation Agency cancels the grounding order.

But Boeing has already carried out around 1,400 test flights.

While refusing to comment on a specific timetable, Mr. Calhoun reiterated Wednesday that he expected a resumption of deliveries by the end of the year.

“We are confident that the planes are ready” to be transported to customers, he said during the conference call. The process by which each device must be approved “has been repeated” with the regulator, ”he added.

In the meantime, the 737 MAX’s problems “have undoubtedly caused us to lose market share” against Airbus, admitted Mr. Calhoun.

But Boeing planes have advantages and “I don’t worry about the ability of the 737 lineup to compete with the A320s,” the official said.

The manufacturer, which has already reduced the production rate of its planes, does not yet plan to slow down the assembly lines even more.

The division devoted to defense, space and security for its part saw its revenues decrease by 2%, to 6.8 billion dollars.

Sales for those dedicated to customer services, such as aircraft maintenance, fell 21% to $ 3.7 billion.

These two divisions “continue to provide us with some stability as we adapt and rebuild to emerge once the pandemic has passed,” Calhoun said.

“The rebound will be solid,” he predicted, and Boeing will be able to respond to it with its “large stock” of planes ready for delivery to customers.