Employees Lose Confidence As Boeing Announces Job Cuts Again

Boeing has to make a tough decision of cutting job to save extra costs and give Airbus a tough fight.

Boeing Corporation is making almost 8000 job cuts by June this year, which is 10% of its commercial unit consisting of 80,000 workers. The airplane maker will be able to save approximately $1 billion when it comes to labor costs. The cut down of the workforce will be witnessed in almost all of the areas from executives to managers without any involuntary cuts.

The aerospace company is aiming to increase its efficiency and productivity at its manufacturing centers by making job cuts. 4500 workers will lose their jobs in June as the airplane maker tries to consequently cut price for its clients and best aircrafts while giving tough competition to its major rival in the market, Airbus. Its rival offers lower prices for jets, which Boeing has taken into consideration and now is taking the necessary action for it. The job cuts are going to be done through attrition and voluntary buyout packages for around 1600 workers.

Boeing Co. considers this as a success in the long-run. It announced plans to make many changes in order to succeed in the market and work as a healthy company. A step to reach this goal would be to save extra expenditures, which also include labor costs. The aerospace giant has spent huge sums of money in automation of its products. It tried to cut down development costs and renegotiating contracts with suppliers, but executives of the company believe that this still is not enough.

Prices of the products being high give the airplane maker lesser flexibility, forcing its clients to go to other companies to purchase jets. This is not good for the business and the company is seeking to change it through job cuts. This is not the first time Boeing is making such an aggressive move, as it did so in 2001, September cutting approximately 30,000 jobs and later 7000 more due to international financial problems.

Boeing did win last year from Airbus in terms of delivery of jets, but the European rival managed to capture 57% of the markets orders. Boeing is being diplomatic when it comes to alerting investors; it says they do not have much to worry about, while it warns its workers about its market shares. 550 job cuts will take place in the flight and lab testing division. For now, many rivals of the company have an upper hand on it mainly because of the low prices they offer, which it plans to change.

This news might be highly damaging for the workers of Boeing, who will lose confidence in job security, as the company has made job cuts in the past too. Recruiting workers later might turn out to be difficult for the business in the future.

Boeing Tankers Delivery To Pentagon Delayed

Boeing is behind schedule and missing the deadline for its tankers that were planned to be delivered to the Pentagon.

Boeing might not be able to deliver the tankers that it had to the Pentagon and will miss the deadline. The airplane maker agreed to reach the goal of manufacturing approximately 18 KC-46 Pegasus tankers by next year in August according to the DCMA, but this goal might be difficult to accomplish and is expected to be at least seven month behind, 2018, March.

The aerospace company might have to face a penalty by the Air Force if it is not able to meet the deadline. The Air Force will even withhold future payments of the company and lower the assessment rating of the airplane maker. The company is supposed to deliver 18 of its KC-46 tankers by August 2017, which is now being delayed to March 2018 or even more.

The Defense Contract Management Agency even went as far as to say that it now has ‘low confidence’ in Boeing Co. promises of deliveries and making them on time, but the company will not slip this to pay the price for it through a penalty. One spokesperson for the company said otherwise, that it would be able to deliver the tanker on schedule.

This tanker is currently undergoing tests; the second tests will took place in the beginning of this month. This tanker has been manufactured for refueling airplanes of United States, used in wars, midair, replacing the company’s previous tanker, the KC-135. Boeing failed many other deadlines, thus agencies don’t have much confidence left in the aerospace giant and its promises. The first tests for these tankers are six months behind and the second test is at least four months behind.

The commercial airplane provider KC-46 will cost the company $5.59 billion in its development, or even $766 million above the budget. The KC-46 Pegasus is a military model of the famous 767 jet, which is also under production. Boeing is staying positive regardless of what others are saying and still believes it will be able to make the delivery of 18 tankers on time. Delivering and manufacturing 18 tankers is difficult task to accomplish, but the company is an expert in making jets and might just be able to make and avoid penalties and disappointments. 

The KC-46 is capable of carrying almost 212,229 pounds of fuel at one time and is ideal for supplying fuel midair to military airplanes. The airplane manufacturer is supposed to deliver the Pentagon with 179 of these tankers costing $39 billion, but the production will not be authorized until the development concerns have been completely dealt with.