So far, 2017 has been a whirlwind of ups and downs for Boeing. The year began with a much-publicized vote that saw Southern workers vote to turn down the opportunity to unionize. Now, the company has announced plans to layoff about 1,800 workers. The company says these cuts have nothing to do with the anti-union vote. They announced there would be cuts way back in December. That, and the fact that the cuts are literally taking place on the opposite side of the country.
The announced job cuts will mostly affect workers in Washington State. The union up there said about 1,500 union members will accept buyout options. Another union said 300 members will take the buyout. And those are only the numbers we know. Boeing may be cutting many more jobs, but they’re not saying how many non-union workers accepted offered buyout deals.
Even still, a few thousand workers is a fraction of the company’s roughly 150,000 workers. The biggest cuts are coming in the commercial aircraft unit. Nearly all of the current cuts will be in that division, a segment that already cut nine percent of its workforce in 2016.
According to the company, the cuts are not coming as a result of any general market turmoil or the up and down relationship the company seems to have with the current Presidential administration. Company leadership is blaming the need for cuts solely on regressing jet sales. And more cuts are coming.
The PR issue here is in the string of bad and good headlines. First, it was a tiff with Trump that had Boeing in the headlines. Then the company and the POTUS seemed to make nice. Then Boeing was in the headlines again thanks to the contentious union battle in South Carolina. Now, it’s cuts, cuts, and more cuts to come.
Can the company successfully sell the message that this is just about market dynamics and not poor competition overseas? Boeing sees strong competition in Europe and Asia, and there’s some noise that outside companies will attempt to gain more of a foothold on the American marketplace.
Competition is good because it keeps you sharp, but when there’s too much competition, it can create detrimental market conditions. It sure doesn’t help when the chief executive of the country is telling you to lower your prices. Still, there’s a lot of 2017 left, and Boeing could pull out of this dive well before Q4.