Boeing announces layoffs in defense division

By Catholic Online (NEWS CONSORTIUM)
11/8/2012
Catholic Online (www.catholic.org)

Pentagon's second-largest supplier takes steps to save billions

Boeing has announced a major restructuring of its defense division. Along with the announcement came news that the firm will cut 30 percent of management jobs from 2010 levels. The company will also close facilities in California and consolidate several business units to cut costs.

U.S. arms suppliers are currently under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.

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LOS ANGELES, CA (Catholic Online) - Boeing employees were made aware about the changes this week in a memo obtained by Reuters, and since confirmed by Boeing.

The Pentagon's second-largest supplier, Boeing said the changes were the latest step in an affordability drive. The action has slashed costs by $2.2 billion since 2010, according to the memo.

U.S. arms suppliers are currently under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.

Chief Executive of Boeing Defense Dennis Muilenburg said in a message that the company aimed to cut costs by an additional $1.6 billion from 2013 through 2015.

"We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it," Muilenburg said.

Savings would reach $4 billion, Muilenburg said making the company more viable and better able to deal with a tougher marketplace.

Boeing will also cut the number of executive jobs an additional 10 percent by the end of 2012, bringing overall cuts in its executive team to 30 percent for the past two years. The move could result in a 10 percent cut in management costs.

Boeing said the changes were not a response to the threat of additional, across-the-board U.S. budget cuts due to take effect on January 2, or the outcome of U.S. elections, but represented another step in its continuing drive to "be more competitive while investing in technologies and people."

The company did not give details on how its employees would be phased out, saying many employees will be repurposed into Boeing's growing commercial business.

A company spokesman declined to say how many jobs had already been cut from the 2010 level.

Rival Lockheed Martin has reduced its management ranks by about 25 percent in recent years after announcing a voluntary buyout.

"Many investors focus on Boeing's commercial operations," Defense consultant Loren Thompson said, referring to the jet-making business.

"But defense provides 40 percent of the company's revenues and returns, so controlling costs there is crucial to maintaining the company's overall profitability."

� 2012, Catholic Online. Distributed by NEWS CONSORTIUM.

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Keywords: Boeing, airline, Pentagon, budget, management

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1 - 6 of 6 Comments

Stanley
6 months ago
Paul - who in their right mind thinks it's a good idea to start a country right now? Get out the "it's the right thing to do," mindset and slip into reality.
Debra
6 months ago
Being a member of those that worked or have worked at Boeing, I CAN SAY with full confidence this is about the bottom line. You bet this is a direct result of the Obama Administration. Those who say this is a good thing are lying to anyone who could potentially be swayed to support THEIR cause. No shame!
Allen Moulder
6 months ago
@Paul
You honestly think someone intelligent will start new a new company in this environment? Have some more kool-aid...
Paul
6 months ago
I know this looks bad if you haven't worked in the research field, but this is actually a good thing. Notice that these are all managers. Those who managed the most will start new companies. Meanwhile both large companies are running leaner and more efficiently.

Believe me, out-of-work engineers and researchers want to see more companies, and the business of technology thrives on the resulting competition.
Jimmy J
6 months ago
Rocket scientists, and aerospace engineers (they must be millionaires and billionaires-- neighbors of ours--> What happened to "Thou shalt not covet your neighbor's goods) to the unemployment lines. Food stamps for all! These people are in need of prayer. This was in line, but our president got the company (and there are many others coming) to hold off the announcements until after the election. Sequestration is what it is called. President Reagan once said something along the lines: "you don't enhance freedom by weakening the free people." Meanwhile, government offices not associated with defence are stocking up with hundreds of thousands of rounds of ammunition. For what?

The USA needs lots of prayer in order that we can pull out of this, and now 4 more years of decline, and be strong again.
Marie
6 months ago
This is no surprise considering defense money will probably be cut. The president sure knows how to create new jobs that way at the unemployment office.

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