More layoffs possible as Boeing will reduce production at SC plant
Two months after 6,770 Boeing employees lost their jobs, the aircraft manufacturing giant said more layoffs could be coming as it continues to struggle financially during the coronavirus pandemic.
In addition to potentially reducing the workforce at its plant in South Carolina, Boeing said Wednesday it is scaling back production at the North Charleston facility. That’s where final assembly on the 787 Dreamliner is done.
It’s possible the plant could be shuttered.
At the beginning of the year, Boeing South Carolina had nearly 7,000 workers on staff. Information on the current number of employees was not available.
“Unfortunately, it’s become clear that we need to make further adjustments based on the prolonged impact of COVID-19,” Boeing President and CEO Dave Calhoun said in a letter to employees. “Regretfully, the prolonged impact of COVID-19 causing further reductions in our production rates and lower demand for commercial services means we’ll have to further assess the size of our workforce.”
Along with the specter of layoffs, a certain change will be reducing the amount if 787s built in South Carolina.
In April, Boeing said it would make 10 of the widebody passenger jets per month this year, and that number will drop to seven per month in 2022 — with the hope that production will increase beyond then.
In Wednesday’s letter to employees, Calhoun said production would now go to six per month in 2021.
“With this lower rate profile, we will also need to evaluate the most efficient way to produce the 787, including studying the feasibility of consolidating production in one location,” Calhoun said. “We will share more with you following our study.”
That could mean closing the facility down, or consolidating production of the Dreamliner exclusively in South Carolina. In addition to the North Charleston plant, the aircraft is also built in Boeing’s production facility in Everett, Washington.
But Boeing’s largest 787 can only be built at the North Charleston site because it’s fuselage is too large for the vehicle that transports parts to the Everett plant, the Seattle Times reported.
The layoffs in May came after the South Carolina plant reopened following a temporary shutdown to slow the spread of COVID-19. That shutdown, and closing other Boeing facilities, cost the company $137 million, and overall the pandemic has cost the manufacturer $1.7 billion, CNN reported.
After June, Boeing said it lost $2.9 billion during the second fiscal quarter of the year, according to its economic report.
“These past few months have been unlike anything we’ve seen. The pandemic’s effect on our communities and industry is ongoing,” Calhoun said. “The reality is the pandemic’s impact on the aviation sector continues to be severe. Though some fliers are returning slowly to the air, their numbers remain far lower than 2019.”
On top of the reduced production of the 787 Dreamliner, Boeing is also cutting back on other aircraft at its other plants. There will be a slower ramp-up in 737 production, with a gradual increase to 31 per month by the beginning of 2022, according to the release.
Additionally, the combined 777/777X production rate will drop to two per month in 2021, and production of the 747 will end in 2022, according to Calhoun.
“The diversity of our portfolio and our government services, defense and space programs provide some stability in the near term as we take these tough but necessary steps,” Calhoun said.
This story was originally published July 29, 2020 at 2:09 PM.
