The one-two punch of COVID-19’s impact on factories and airlines has dealt a brutal blow to aviation manufacturers in the United States. Boeing Co. and GE Aviation both announced measures today to cut staff as factories close their doors and clients struggle to sell flights to a country under quarantine.
In an open letter to employees April 2, Boeing CEO Dave Calhoun announced his company would offer voluntary buyouts to its employees as it attempts to navigate what Calhoun called the “uncharted waters” of the coronavirus outbreak. Calhoun said that more information on the “voluntary layoff” plan would be available in three or four weeks.
In Calhoun’s letter, he told his employees that, even after the coronavirus has passed, the re-emerging market for air travel might change, and that Boeing would have to adapt to that change.
“We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come,” Calhoun wrote. “It’s important we start adjusting to our new reality now.”
In March, Boeing suspended production at their Seattle-area production plants after Washington Governor Jay Inslee declared a state of emergency. According to Transport Topics, Boeing currently has tentative plans to reopen those factories for an overnight shift starting April 7 as the situation on the West Coast slowly stabilizes.
GE Aviation also announced cuts to its workforce. On April 2, the aviation supplier announced it would furlough 50% of its engine-making workers for four weeks. The move comes less than two weeks after GE announced it would cut all workers in the division by 10% on March 23. 50% of GE Aviation’s maintenance, repair, and overhaul employees are also currently going through a 90-day “lack of work period” since the earlier announcement.
In a recent letter to Congress, Boeing lobbied for aid in the form of government loans, arguing that failing to support them would spell worse conditions for their manufacturing suppliers elsewhere in the country. The Chicago-based plane manufacturer stands to benefit from the bill, which included $17 billion for “firms vital to maintaining national security,” a likely reference to Boeing.
