It would not be surprising if Boeing’s management had gauged Donald Trump’s protective policies early on and had let it be known that it would be trimming its workforce. After all, during the campaign trail Trump had been very loud and vocal boosting American jobs in the country. Trump had also come down hard on the defence industry for its high priced acquisitions. Both of these issues are at play here, after all there is a reason why Boeing had engaged the services of a new lobby group.
Facing increased competition and a slowdown in aircraft sales, Boeing has warned that it will conduct involuntary layoffs of engineers as part of its cost-cutting drive in the aerospace and the defence sector.
The layoffs, disclosed in an internal memo, include jobs categories for voluntary layoffs in states, such as South Carolina, Washington and southern California.
Incidentally, Boeing did not disclose the number of layoffs it has planned.
In December 2016, both Ray Conner, Boeing’s Vice Chairman Kevin McAllister, Boeing’s CEO of Commercial Airplanes had disclosed that the company would trim its workforce in 2017.
Last year, Boeing cut 10,828 jobs, two-thirds of which were in the state of Washington.
“While we have made good progress, more changes are needed to ensure our long-term future,” wrote John Hamilton, VP of engineering at Boeing Commercial Airplanes, in the memo. “We continue to operate in an environment characterized by fewer sales opportunities and tough competition.”
Details of the internal memo surfaced when Boeing teamed up with a new lobbying group to defend its $8.7 billion tax break in the state of Washington, which was granted to the aerospace industry by the state in 2013.
The new lobby group is aims to show that Washington’s incentives given to the aerospace industry in 2013 cannot and should not be linked to Boeing’s job streamlining and cost cutting efforts in 2017.
Moreover, the layoffs of its engineers are part of a larger effort at reducing the overall workforce in Boeing’s airplane manufacturing unit.
“Once plans are finalized across other functions, that information will be shared with employees,” said Doug Alder, Boeing’s spokesman. “Each function will determine its own plan.”
The overall reduction will take place in stages. Invitations for voluntary layoffs will be sent on January 13, with their effective dates being April 21.
Boeing will issue notices for involuntary reductions on January 20, which will be effective from March 24.
According to the internal memo, two more rounds of engineering layoffs are possible. However, these will be “driven by our business environment and the amount of voluntary attrition,” said Hamilton in the memo.