Boeing unveiled Tuesday a new round of buyouts for engineers companywide, and warned that layoff notices will follow later for engineers in Washington state. Two more rounds are likely later this year. A similar buyout offer is expected Wednesday for some production workers.
Boeing announced internally on Tuesday a new round of employee buyouts for engineers companywide, and warned that layoff notices will follow later this month for engineers in Washington state.
Management did not disclose a target for the number of projected job cuts.
Last month, company vice chairman Ray Conner and the new chief executive of Boeing Commercial Airplanes (BCA), Kevin McAllister, warned that further employment reductions loomed in 2017.
John Hamilton, BCA vice president of engineering, sent a memo on the job cuts shortly after noon Tuesday to all BCA engineering employees, managers and executives.
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“As we enter 2017, our plan calls for us to reduce our engineering staff,” Hamilton told employees. “I realize some of this news is unpleasant. But I wanted to respect your right to know what is occurring this year.”
Hamilton’s memo states that details of a buyout offer will be sent on Friday to engineering employees in eligible skill classifications. The last workday for those who accept the buyout will be April 21.
A similar buyout offer is coming on Wednesday for certain classifications of blue-collar production workers, said Connie Kelliher, spokeswoman for the International Association of Machinists (IAM) union.
The engineering buyout package will be offered to employees in Washington state, Southern California and South Carolina.
Hamilton’s message also said 60-day involuntary layoff notices — affecting only engineering employees in Washington — will be sent out Jan. 20, with layoffs effective March 24.
Those layoffs will involve employees in the skill classifications that were offered a buyout package last year, he said.
This year’s buyout offer is going out mostly to employees in different skill classifications. There will be further involuntary layoffs if not enough people accept the offer and it falls short of Boeing’s cost-saving target.
Hamilton said that there will be two additional rounds of buyouts and layoffs in engineering later this year.
The extent of the follow-on job cuts “will be driven by our business environment and the amount of voluntary attrition,” he said.
“We continue to operate in an environment characterized by fewer sales opportunities and tough competition,” Hamilton said. “The decision to lower the production rate on the 777 program announced in late December underscores that environment and what we need to do to help Boeing win.”
Boeing spokesman Doug Alder said the workforce reductions will be achieved where possible through attrition and voluntary buyouts before involuntary layoffs.
He said the company will also “aggressively reduce overall spending in 2017 in nonlabor areas.”
Ray Goforth, executive director of Boeing’s white-collar engineering union — the Society of Professional Engineering Employees in Aerospace (SPEEA) — said the process Boeing is following in cutting jobs was worked out in the discussions that led to last year’s surprise agreement to a new six-year SPEEA contract.
“This is all stuff we negotiated into that contract,” Goforth said. “We knew the company was going to lay off significant numbers of people. We wanted to make it as painless as possible.”
Last year, a combination of leaving open positions unfilled, buyouts and layoffs slashed the Boeing workforce in Washington state by 7,357 jobs — a 9.3 percent reduction.
Of those, 1,200 employees were represented by SPEEA. That figure included 350 forced layoffs, or just less than 30 percent of the SPEEA cuts.
The IAM’s Kelliher said her union’s membership dropped by 2,100 members in 2016, with no forced layoffs.
The latest issue of the IAM newspaper AeroMechanic lists more than 460 machinists who retired in the last couple of months, many of them having taken buyouts.