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Boeing Cuts 16,000 Jobs In Plans To Survive Coronavirus Crisis
Posted
April 30, 2020
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1:17Now PlayingBoeing soared after executives outlined a road map to survive the worst downturn in aviation history, and assured investors that the company has the means to make it through. If all goes to plan, the aerospace titan will be generating cash again by next year.
The U.S. planemaker is shrinking its workforce by about 10%, or about 16,000 jobs, to conserve cash. Work will slow in its factories, with 787 Dreamliner output cut for a third time in successive quarters. Boeing expects to restart production of the grounded 737 Max this quarter at a gradual pace as key customers like Southwest Airlines Co. curb growth ambitions.
The unprecedented collapse in air travel spurred by the Covid-19 outbreak is forcing Boeing into a fight for its life as passenger totals plunge 95% in the U.S. alone. Addressing investors’ worst fears, Chief Executive Officer Dave Calhoun and Greg Smith, his top lieutenant, emphasized that the company has the balance-sheet strength and access to capital to withstand the pandemic and global recession.
The executives “gave confidence that they’re going to come out on the other side,” said Robert Spingarn, an analyst with Credit Suisse Group AG. “So, solvency isn’t an issue.”
The shares advanced 5.9% to $139 at the close in New York. Boeing has plunged 57% this year, the worst drop on the Dow Jones Industrial Average.
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