Coronavirus pushes Boeing to offer early retirement, buyouts
Aerospace giant is pushing to control costs as aviation industry struggles with pandemic
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Boeing Co. is expected to begin offering early retirement and buyout packages to its workforce as the plane maker comes to grips with the coronavirus pandemic’s deepening toll on the global aviation industry, people familiar with the matter said.
An internal announcement was expected as soon as early Thursday, one of these people said.
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The Chicago-based aerospace giant is the largest U.S.exporter and one of the nation’s largest manufacturing employers. It has previously announced steps including a freeze on hiring and overtime as it seeks to preserve cash amid turmoil in the credit markets and a broader economic downturn.
Boeing’s airline customers and some of its suppliers have already sought to cut labor costs—with measures including layoffs and voluntary leave without pay—as the pandemic wreaks havoc across the air-travel and aerospace industries.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | THE BOEING CO. | 145.21 | -3.76 | -2.52% |
Boeing, whose workforce numbers approximately 160,000, hasn’t announced any layoffs, even after cutting and then suspending production of its 737 MAX jet in January and assembly of most wide-body planes last month.
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Almost 65,000 of its employees build commercial aircraft, and a further 25,000 work in the unit that provides spares and services to airlines.
Executives have said they were seeking to avoid layoffs as they sought taxpayer help to ease its financial strain and plan for a recovery.
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Boeing Chief Executive David Calhoun has said he wants to prepare for when the crisis abates. “I have to keep my workforce in place and we have got to be ready when the recovery comes,” he said last week in an interview on Fox Business Network.
Boeing sought at least $60 billion in government aid for itself, its suppliers and the broader aerospace sector. The company hasn’t said whether it will seek loans under a $2 trillion stimulus package approved in Washington, D.C., last week. Some of the aid would come with restrictions on layoffs.
As the pandemic worsened in March, Boeing suspended its dividend and temporarily halted production at its Everett, Wash., factory north of Seattle.
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Its share price doubled last week as investors bought on expectations that government aid would ease a liquidity squeeze, but has fallen sharply in recent days as analysts warned that more airlines may seek to cancel orders or be unable to take new planes.
Write to Andrew Tangel at Andrew.Tangel@wsj.com