Boeing Co on Monday told its workers that it expected to cut as many as “several hundred” jobs in its satellite business through the end of this year, due to a downturn in US military spending and delays in commercial satellite orders.
Multiple commercial orders were being delayed by recent failures of launch vehicles and uncertainties about the future availability of financing from the US Export-Import Bank (EXIM), whose government charter lapsed on June 30, the company told key managers in an internal communication.
Boeing spokesman Tim Neale confirmed the reductions and said the total number of people affected would be finalized in coming months.
Photo: Bloomberg
Some could find work in other parts of Boeing, Neale said.
He said the reductions were “necessary to remain competitive for ongoing and future business.”
The Boeing announcement marks the latest fallout from the ongoing debate about the future of the bank and the US government’s export credit agency, which can no longer write new loans and trade guarantees.
US government officials have said they are growing more concerned about the impact of the bank’s forced shutdown on a wide range of US companies, including many small businesses.
Tea Party conservatives in the US Congress did not vote to renew the agency’s charter, saying that the trade bank provides “corporate welfare” for big companies like Boeing and General Electric Co.
Business executives said it was unclear if the bank would be reopened.
EXIM backers say the bank generates revenue for the US government and helps level the playing field for US companies whose rivals in other countries receive similar trade credits.
Boeing does not break down workforce numbers for separate business units, but the company has about 16,800 workers in California, where it builds satellites and does some commercial airplane work.
The announcement came a little more than a month after commercial satellite provider ABS canceled a large satellite contract with Boeing due to uncertainty about the future of the bank.
Neale said Boeing officials were still working with ABS, based in Bermuda and Hong Kong, to find an alternate financing solution, but ABS was in active discussions with other satellite makers that had access to government trade credits.
He said many of Boeing’s international customers relied on EXIM financing to buy commercial satellites and airplanes, and uncertainty about EXIM’s future was making those buyers “very nervous.”
“In the absence of EXIM, Boeing may need to serve as the lender of last resort, but there are real limits to how much of this the company can do,” Neale said.
Boeing said it expects China’s aviation industry to withstand the turbulence in financial markets and forecast the nation’s carriers will almost triple their commercial aircraft fleet over the next two decades.
The plane fleet in China will surge to 7,210 by 2034 from 2,570 last year, Boeing said in a statement distributed in Beijing yesterday.
The Chicago-based company also forecast China needing 6,330 new planes worth US$950 billion in the next two decades.
“Despite the current volatility in China’s financial markets, we see strong growth in the country’s aviation sector over the long term,” Randy Tinseth, vice president of marketing at Boeing’s commercial airplane unit, said in the statement.
China is also forecast to become the world’s biggest air travel market, according to Boeing.
Boeing estimates single-aisle jets will account for nearly three-quarters of future demand, while low-cost carriers will account for as much as 30 percent of China aircraft demand by 2034, up from the current 8 percent.
Additional reporting by Bloomberg
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS