July 12, 2020

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Boeing in Winnipeg hit with job cuts

Nearly one-quarter of Boeing’s workforce in Winnipeg will be laid off in the next few weeks as a result of COVID-19, the company said.

"Due to the impact of the COVID-19 pandemic, Boeing previously announced we would adjust the size of our company to reflect new market realities through a combination of voluntary layoffs, natural turnover and involuntary layoffs," Boeing spokeswoman Jessica Kowal said in an email statement Sunday.

The company plans to lay off approximately 400 positions in Winnipeg. Boeing employs around 1,600 people in the city at its two sites at 99 Murray Park Rd. The Winnipeg operation is Boeing’s largest in the country. 

Winnipeg employees were made aware of the layoffs Friday, and the cuts will be carried out within the coming weeks, the statement said.

Kowal said the deepest cuts would be made in "areas most exposed to the commercial aviation market as well as our corporate functions."

No representatives from Unifor Local 2169, which represents Boeing employees, were available for comment.

The Winnipeg operation manufactures more than 500 end-item composite parts and assemblies, including wing to body fairings, landing gear doors, and engine parts for the 737 MAX. It also designs and manufactures many parts for the 787 Dreamliner. 

Earlier this month, Boeing said it failed to sell a single commercial airplane in April, and orders for 108 planes were cancelled last month as a sharp drop in air travel erased demand for new jetliners.

When it released its first-quarter results on April 29, the company announced it would cut 10 per cent of its 161,000-person workforce through attrition, early-out offers and layoffs.

Boeing had burned through US$4.3 billion in cash in the first quarter and lost US$641 million in earnings.

"The COVID-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain stability," said Boeing president and CEO David Calhoun. "Our primary focus is the health and safety of our people and communities while we take tough but necessary action to navigate this unprecedented health crisis and adapt for a changed marketplace."

The company is being battered by dual crises from the COVID-19 pandemic and the 737 Max disaster, which has dragged on for more than a year. 

Last December, the Free Press reported that Boeing had no expectation it would trim its Winnipeg workforce despite the grounding of the 737 Max by regulators in March 2019, after crashes in Indonesia and Ethiopia. Boeing continued to build new airplanes; about 400 completed planes sat on Boeing tarmacs in Seattle, which could not be delivered to customers.

Then the pandemic hit and the company was dealt another massive blow. 

Boeing said last month it would take several actions, such as reducing commercial airplane production rates. The company also announced a restructuring of its leadership and organization to streamline roles.

Boeing said it had reduced operating costs and discretionary spending, suspended dividends until further notice; reduced or deferred research and development and capital expenditures; and eliminated CEO and chairman pay for the year.

The company said additional liquidity would be critical for the aerospace manufacturers to get through the pandemic perils.

"We continue to support our defence customers in their critical national security missions. We are progressing toward the safe return to service of the 737 Max... Air travel has always been resilient, our portfolio of products and technology is well positioned, and we are confident we will emerge from the crisis and thrive again as a leader of our industry," said Calhoun.

julia-simone.rutgers@freepress.mb.ca

Twitter: @jsrutgers

Julia-Simone Rutgers

Julia-Simone Rutgers
Reporter

Julia-Simone Rutgers is a general-assignment reporter.

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Updated on Sunday, May 24, 2020 at 11:19 PM CDT: Updated and edited

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