[imagesource: Boeing]

Once the foremost manufacturer of aircraft, Boeing has had a rough two years.

In 2019, two computer-related disasters in five months, including the now infamous Ethiopian Airline crash, launched Boeing into one of the biggest crises in its century-long history.

The Boeing 737 Max, a revamp of the plane that accounts for a third of Boeing’s operating profit, was grounded worldwide.

Earlier this month, British Airways retired its fleet of 747s (The Queen of the Skies) four years ahead of schedule. A number of airlines have been replacing its 747s with more advanced and more efficient twin-engine planes.

The company has been struggling to claw back profits, a process that was further impeded when the pandemic hit, borders closed, and air travel worldwide was put, for the most part, on hold.

The company has thus lost $2,4 billion in just three months.

Boeing CEO Dave Calhoun, reports CNN, sent a note to employees saying that “prolonged impact” of the virus will require the company to “further assess the size of our workforce”.

That’s a nice way of saying that the company will be cutting more jobs than the initial estimate of 16 000, which was already 10% of its workforce.

Wall Street wasn’t shocked by the numbers. Investors already knew Boeing’s deliveries 10 jets last month as it began ramping up production after its factory was shuttered by the pandemic.

But, as outlined in the note, Boeing is also planning to scale back production of all its commercial jets, potentially closing down entire assembly lines of its 787 Dreamliner jets.

“We will also need to evaluate the most efficient way to produce the 787, including studying the feasibility of consolidating production in one location,” Calhoun said.

He declined to share further details with reporters. Boeing manufactures the 787 Dreamliner at a dedicated facility in Charleston and at the company’s massive plant near Seattle.

The company aims to produce just six 787s per month in 2021, down from the current rate of 10. The production of the 777 is also set to be downscaled to two per month, as opposed to five.

While the company has more than 4 500 orders pending, which is enough to keep its factories going for a few years, 843 orders have been cancelled.

To help ease the financial pressure, Calhoun said the company has temporarily stopped paying investor dividends, halted its stock buyback program, cut spending and costs, and taken on $25 billion in debt.

The company previously said that it needed a $60 billion bailout to survive the pandemic, before refusing to accept grants and loans via the CARES Act – a $2 trillion stimulus package designed to keep businesses afloat during the pandemic.

It looks like dark days ahead for employees of the aircraft maker.

[source:cnn]