Posted on 12/15/2001 11:32:23 AM PST by BooBoo1000
Friday December 14 4:27 PM ET Boeing Exec: Layoffs to Be at Least 25,000 SEATTLE (Reuters) -
Boeing Co. expects to lay off at least 25,000 workers by the middle of next year, the head of the aerospace giant's commercial aircraft business said on Friday, in comments that raised the minimum number of previously announced job cuts by 25 percent.
Chicago-based Boeing said in September it would cut 20,000 to 30,000 workers in its Seattle-area jetliner unit, saying the post-Sept. 11 travel slump has forced airlines to scale back orders for new jets.
Boeing's commercial jet chief, Alan Mulally, defended the cuts on a Seattle talk radio program, telling angry callers the reductions would keep the company nimble as it halves production of airliners.
``Right now, our best projection is that we are going to have to reduce our team by 25,000 to 30,000 by the middle of next year,'' Mulally said when asked how many layoffs would be made. `
`That goes right with our projection of new airplanes, going from 48 airplanes a month to 24 airplanes a month,'' Mulally said.
Boeing's top brass had no plans to take salary cuts, citing the need to make sure the company could keep talented executives in tough times, Mulally said.
Shares in Boeing rose 32 cents to $37.32 in early afternoon trading on the New York Stock Exchange. Though that is nearly 40 percent higher than the year low of $27.61 hit in late September, it is still well below the high of about $70 it traded at almost exactly one year ago. --------------------------------------------------------------------------------
Congrats. But that doesn't make you an expert on the company. I have my own views about it, which seem to have provoked a very emotional reaction in some people. Basically my view is that Airbus is winning the commercial aircraft competition, and that the US government is using our tax dollars as a kind of welfare to bail out Boeing. Am I wrong about this? Why?
However, that's not the point. You make an assertion that Boeing is abandoning the commercial aircraft business; an assertion that is not only patently ludicrous but flies in the face of both common sense and reality.
I've watched the commercial aircraft business for many years. No, I am not an "expert", whatever the hell that really is. However, I do know about the cyclical nature of the aerospace industry. I remember very HIGH highs and very, very low lows in the business. Two things had a devastating impact on that industry this year: 1) obscenely high fuel prices, causing airlines to put aircraft orders on hold while they tried to get a rein on costs (remember earlier this year when we were getting socked as much as $2.50 per gallon at the pump? .......hurt the airlines, too; big time) and 2) the devastation of the country's travel / leisure / entertainment industries since 9/11. Many of those aircraft orders on "hold" turned to "cancellations". C'est la vie. Boeing will weather it; they've weathered far worse.
I don't know who has a better case, but you are admitting here that there is a case.
If they weather it, that will be due to billions of dollars in US government subsidies.
I refuse to get on any plane named after the sound it makes when a part falls off. :o)
We all knew it would not be reasonable for aircraft manufacturers to proceed at their previous pace after 9/11. The need for aircraft will just be smaller, no getting around it.
Now you're changing horses. First, they're "abandoning the commercial market". Now, they're going to get or are getting "billions of dollars in US government subsidies." Which is it? I must also ask for your evidence of such "subsidies".
Bears repeating. What I read was that they were arrogantly hostile to Boeing re: zoning approvals and the like...kept making 'em jump through hoops. Well, the libs are taking in the shorts now. 25,000 jobs in Seattle is HUGE. HUGE. There goes the real estate market.
You probably have trouble remembering your wife's birthday, too.
I understand they have a plan to shut down the Renton plant, which is in the Seattle metro region.
There is no contradiction here. By "commercial market" I meant private airlines.
I must also ask for your evidence of such "subsidies".
Well, see post 33, for example.
To the best of my knowledge, the Airbus case against Boeing is that Boeing's space and military contracts provide "indirect" subsidy to Boeing Commercial because revenue from those contracts can be used to shore up the commercial side when it suffers a downturn and that knowledge gained on the defense side can be used by the commercial side to make it's products better. To date, I don't believe our government has cut a check directly to Boeing, but I do know for sure that Airbus was founded and to this day survives on DIRECT cash subsidies from the member governments that make up it's family of companies.
If the fedgov does cut a check to Boeing as a way of bailing them out of this crisis (which I don't think they will do, nor do I think it is necessary), then that would be a direct subsidy on par with what Airbus has received going on thirty years now.
Either way, it's a HUGE capital outlay in times of cash shortages and uncertain future with a payback time measured in many years.
Not likely to happen anytime soon in my opinion.....
This is misleading.
The $17.5 Billion subsidy goes to the airlines, who will now be able to pay their bills to Boeing, thus bailing out Boeing. Here's a quote from Forbes:
Management & Trends Boeing Waits For Airline Bailout Tara Murphy, Forbes.com, 09.19.01, 4:20 PM ET
Although it doesn't stand to get a cut of the possible $17.5 billion in aid directly, Boeing's commercial jet segment could be buoyed if the airlines receive adequate aid from the government, says Cai Von Rumohr, analyst at S.G. Cowen. "[Boeing] could have a customer that might be able to pay some of [its] bills, so that could help [Boeing] indirectly," says Von Rumohr.
http://www.forbes.com/charitable/2001/09/19/0919ba2.html
Boeing has financed some (not many) of the airline purchase deals, so they may get some of this bailout cash in the form of payments they were already owed, but no airline that is going to get bailout help from the fedgov is going to use it to run out and buy new aircraft, IMHO. They're going to use it to pay back loans on day-to-day operating expenses and the like.
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