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Boeing Resumes 737 MAX Production Amid Layoffs
The Boeing Company announced it will resume limited production of its 737 MAX aircraft in Renton, Wash. while also advising it will need to involuntarily lay off 6,770 employees to offset the economic impact of the coronavirus on the worldwide airline industry.
David Calhoun, Boeing’s Chief Executive Officer (CEO), stated in an internal memo to Boeing’s 150,000 employees that “The COVID-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices.”
The company did not specify how the layoffs will be distributed across its many divisions but Calhoun has said the commercial airplanes and services division will bear the largest share of the layoffs, totaling approximately 15% of the division’s workforce.
In addition to the Involuntary Layoffs (ILO), Boeing will also see another 5,200 workers leave the company under its Voluntary Layoff (VLO) program implemented in April 2020.
On the same day it announced its staffing cuts, Boeing also indicated it will resume production of its beleaguered 737 MAX aircraft, a sign that the measures it has put into place to address safety and internal concerns in building the aircraft may have gained Federal Aviation Administration concurrence to its plan.
“The steps we’ve taken in the factory will help drive our goal of 100 percent quality for our customers while supporting our ongoing commitment to workplace safety,” said Scott Stocker, the company’s vice president of 737 manufacturing.
A dozen initiatives, focused on enhancing workplace safety and product quality, have been implemented by the U.S. manufacturer. During the temporary suspension of production that began in January, mechanics and engineers collaborated to refine and standardize their processes and procedures. Among those were improvements to work packages in each position of the factory and new kitting processes that will ensure employees have everything they need at their fingertips to build the airplane.
Calhoun, widely criticized by industry leaders for his comments on a recent NBC Today Show segment for predicting the imminent shutdown of a major U.S. carrier, softened his tone on the airline industry’s status in this week’s announcement. “We are seeing some green shoots. Some of our customers are reporting that reservations are outpacing cancellations on their flights for the first time since the pandemic started,” the CEO said.
For the Boeing employees who will stay on the job, Calhoun wrote in his letter that “enormous challenges remain.” The company will have to adjust its business plans constantly until the global pandemic stops “whipsawing our markets” in ways that are still hard to predict, he wrote.
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