Boeing Co. (NYSE: BA) has decided that it wanted to get into the business of pink slips. The aerospace and defense giant announced that it plans to shed some 4,500 workers. The cuts are coming in its commercial airplanes unit and according to the company will take it back to levels of earlier a year ago. Boeing did note that attrition and reduced contract labor account forsome of the reductions. But some layoffs will be necessary, and mostof the cuts will come in the second quarter.
These cuts are mostly in areas not directly tied to airplane productionand are meant to bring the unit down to roughly 63,500 workers.
We already knew some layoffs were coming based upon comments lastyear. It is no secret that it has severe delays in its new planeorders, and those who have not canceled or pushed out orders are onlylikely to from here.
Commercial airplane orders fell by more than half in 2008 anddeliveries were down about 15% in the same period. It turns out that anon-existent credit market keeps new orders down if a recession alonedoesn’t.
This could have been broadcast from the Land of Duh. That is why it has had virtually no impact on shares.
Jon C. Ogg
January 9, 2009
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