Boeing will offer buyouts to employees

Boeing said Thursday it will offer voluntary buyouts to its 160,000 employees as the aircraft manufacturer struggles to cut expenses amid the worldwide economic slowdown caused by the coronavirus pandemic.

In a statement, CEO David Calhoun said recovery will take years, and the types of products and services demanded by customers will be different when the world emerges from the outbreak.

Calhoun said Boeing therefore must start now to adjust to the dislocations caused by an upended world economy — especially in the area of personnel.

"We want to address it through natural turnover and voluntary employment actions to the extent we responsibly can," Calhoun said in a memo to employees.

"To that end, we are initiating a voluntary layoff plan that allows eligible employees who want to exit the company to do so with a pay and benefits package. The move aims to reduce the need for other workforce actions."

At the same time, Calhoun said Boeing will continue to recruit in key areas to be sure it can meet the immediate and future needs of customers.

Calhoun didn't disclose any details about the buyout packages.

Boeing employs about 65,000 workers to build aircraft and another 25,000 to provide services for commercial airlines.

The company, based in Chicago, is the largest US exporter and one of the nation's largest manufacturing companies. Its stock is one of the 30 blue-chip companies tracked to compile the Dow Jones Industrial Average.

In January, Boeing reported a loss of $636 million in 2019 compared with a profit of $10.46 billion in 2018 — its first annual loss in more than 20 years. Boeing suspended dividends to investors in March. The CEO and chairman of the board agreed to forego pay through 2020.

Previously, the company closed assembly plants in response to state stay-at-home orders intended to curb the spread of COVID-19. The orders are likely to remain in place at least through April and perhaps into May or June.

Many airlines have canceled flights as demand for travel fell, reducing demand for Boeing's planes and services.

Some of Boeing's suppliers have announced layoffs, including Spirit AeroSystems in Wichita, Kansas. The builder of fuselages for the 737 MAX laid off about 2,800 workers after Boeing temporarily suspended production of the plane in January.

The MAX, Boeing's best-selling jet, has been grounded worldwide since March 2019, following crashes in Indonesia and Ethiopia that killed a total of 346 passengers and crew.

Investigators believe the MAX's automated anti-stall device, called Maneuvering Characteristics Augmentation System (MCAS), erroneously pointed the nose of the planes down to avoid a midair stall and into a fatal plunge.

Boeing has updated the system's software, but the US Federal Aviation Administration (FAA) hasn't yet approved it. Prior to the coronavirus outbreak, Boeing hoped to have the MAX back in the air by summer. But the FAA said there is no deadline for recertifying the aircraft.

During the grounding, rival Airbus has overtaken Boeing as the world's largest aircraft manufacturer.

Boeing hasn't announced plans to seek loans through the $2 trillion relief packaged signed into law last week by US President Donald Trump. But the company said it won't give the government an equity stake in the company to secure a loan. In any case, federal loans could come with restrictions on layoffs.

The company's stock price climbed last week because investors believed the federal loan package would ease cash-flow concerns. But the stock has dropped over the last several days after analysts warned more airlines may cancel orders, and demand for air travel showed no signs of rebounding.

Shares of Boeing fell $7.43, or 5.7 percent, to $123.27 on Thursday, but were recovering in after-hours trading.