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Boeing Announces Layoffs, Ramps Up Max Production

Boeing CEO says despite the job cuts, he sees “green shoots” in return to travel

May 28, 2020

Boeing has announced a new round of 6,700 involuntary layoffs on May 27 as a part of a plan to skim a total of 16,000 jobs from the embattled company’s expenses.

“We have come to the unfortunate moment of having to start involuntary layoffs,” said Boeing CEO David Calhoun in a statement. “I wish there was some other way.”

The company still faces enormous challenges, Calhoun said. “Keeping our colleagues healthy and safe is chief among them. So is supporting our customers and suppliers through the recovery, and working with them to assure the traveling public that it can fly safe from infection. We also will have to adjust our business plans constantly until the global pandemic stops whipsawing our markets in ways that are still hard to predict. Through it all, the safety of our products and services will remain priority No. 1.”

Nonetheless, Calhoun expressed guarded optimism. “We are seeing some green shoots,” he said. “Some of our customers are reporting that reservations are outpacing cancellations on their flights for the first time since the pandemic started. Some countries and US states are starting cautiously to open their economies again.”

During the company’s first quarter analysts’ call, Calhoun said he expects airlines to re-evaluate their fleet planning strategies. “More than 2,500 aircraft with 20-plus years of service were in active service prior to the crisis,” he noted, and several airlines have already announced plans to standardize and streamline their fleets.

At the same time as the layoffs were announced, Boeing said it would be resuming production of its 737 Max aircraft  after a months’ long hiatus. An FAA green light for the Max Jet is still pending after two crashes in 2019.

In announcing the Max Jet amp up, Boeing said production would recommence at “a low rate” and safety would be the number one priority. The stock market responded by lifting the company’s stock 4 percent in extended trading after the announcement of the Max effort.

Boeing will also be participating in a study along with competitor, Airbus to study ways in which the coronavirus spreads in a contained jet interior.

The Wall Street Journal reported the two competitors would be participating in a new study on coronavirus spread with medical experts, engineers and federal authorities.

Research touted by IATA says that existing HEPA filters on aircraft are sufficiently engineered to keep the virus from spreading onboard but consumer advocates and safety experts have questioned that assumption.

In an appearance on NBC’s Today Show on May 12, Calhoun told the show’s host, Savannah Guthrie, that he was “hopeful” there would be a vaccine soon and “the moment of high anxiety begins to really subside. But I still believe in the future of the industry.”