Boeing offers buyouts to workers, weighs wide-body jet cuts
By Julie Johnsson and Siddharth Philip / Bloomberg News
Boeing is offering employee buyouts and weighing additional savings measures such as new output cuts, as the coronavirus pandemic threatens to depress aircraft sales for years.
While the company has yet to alter production plans, it’s taking a closer look at manufacturing rates for wide-body jets amid plunging demand, said a person familiar with the matter. Boeing was already planning to make fewer 787 Dreamliners this year, and is still assessing the rapidly changing market and public health issues as the outbreak guts travel demand and batters airlines.
“When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different,” Chief Executive Officer David Calhoun said in a message to Boeing’s 161,000 employees Thursday. “It’s important we start adjusting to our new reality now.”
The move will preserve much-needed cash at Boeing, which along with European rival Airbus is facing a sharp contraction in the jetliner market. Airlines around the world have slashed schedules and parked aircraft. About 44% of planes are in storage, according to data provider Cirium. And with global virus cases approaching 1 million, there’s no telling when carriers will return to normal schedules, much less start buying jets again.
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