Pink Slips
7:29 pm
Thu April 18, 2013

Boeing Engineering Layoffs To Start Friday

Boeing plane manufacturing.
Credit Courtesy/Boeing Company

Boeing officials say pink slips will go out Friday to about a hundred engineers in the Puget Sound area. It’s the first round of more expected cuts for the engineering staff, which Boeing said it plans to reduce by 1,500 to 1,700 positions through layoffs and job openings that will not be filled.

Boeing said it plans to layoff up to 700 people from the engineering staff by the end of 2013, however, company spokesman Doug Alder Jr. said it’s unknown if all those jobs cuts will be in Washington state.

Scott Hamilton, an aviation industry consultant with Issaquah-based Leeham Company, said the cutbacks have nothing to do with the recent problems with the Dreamliner’s lithium ion batteries. Rather, Hamilton said Boeing currently needs fewer engineers because it’s finished some one-time, non-recurring work on the 747 and 787 planes.  

That’s one reason for the job cuts in the Seattle area, but Hamilton sees another. “Well, Boeing-Chicago hates the unions,” he said. “That’s pretty clear.”

Hamilton said he’s watched a clear pattern of Boeing move more work form union states, like Washington and Kansas, to non-union states like Texas and South Carolina. Hamilton believes that trend will continue.

“I think what you’re going to see is a steady migration over the course of a 15- or 20-year period,” Hamilton explained. “I also would believe that Boeing would continue to maintain a presence at Everett, but someday I think the Renton facility will probably go away as they design a brand-new airplane to replace the 737.”

As to whether Boeing’s laid-off engineers would be able to find comparable work in the Seattle area, Hamilton guess is “probably not.”

Mike Dalaney, vice president of Engineering for Boeing Commercial Airplanes, sent an email about the layoffs to all engineering managers Thursday morning. It said that production continues to ramp up, but future work is too far out to maintain the current staffing levels. Here's the full text of Delaney's email:
 

My message today provides context and background on actions we are taking regarding the employment level in BCA Engineering. As we move from a lengthy period of non-recurring development efforts, BCA Engineering will require fewer employees by year-end. Overall, we must reduce our Engineering employment level by 1,500 to 1,700 positions during 2013.

We have already taken action. During the past year, we significantly scaled back external hiring to maximize redeployment opportunities across the function. Since last fall, we also have steadily reduced use of contract employees. Almost 700 contract employees have left the payroll since October 2012, and we will continue that effort where appropriate. Additionally, attrition associated with retirements and other departures has reduced employment. That, too, will continue.

Unfortunately and unavoidably we must take additional actions that will impact some direct employees. Beginning tomorrow and through the rest of 2013 we will issue 60-day layoff notices to as many as 700 employees in our function. On Friday, approximately 100 individuals in the Manufacturing Engineering (ME) skill in the Puget Sound region will receive notices. Those employees are the first to receive layoff notices because they directly support the production system, which has been stabilizing in parts of our major development programs. You may recall that several hundred hourly employees in Manufacturing & Quality also received notices.

This has been a difficult decision. We know layoffs impact individuals and families.

We are taking these actions now for two reasons. First, completion of non-recurring development work on the 747-8, 787-9 and the KC-46 Tanker will result in lower overall Engineering employment requirements. But also, potential development programs for the 787-10X and 777X, which might have provided opportunities to avoid these layoffs, have not been formally approved and launched.

I realize this news may be surprising. Commercial Airplanes has been on an upswing for several years. We continue to ramp up production on our major programs, and the prospect for future development work is very positive. The challenge we are facing is that those yet-to-be-launched programs are too far out for us to maintain present levels of employment.

We hope to mitigate the number of layoffs through the reductions we are making in contract labor, by natural attrition and by not filling many open positions. As we have always done, Boeing will support employees with layoff benefits and career-transition services.

We regret the disruption this situation may cause for some employees and their families but the prudent actions we are taking now will position us to remain competitive and provide future opportunities.

As our management team, please make yourself available for questions and conversations with your team about this situation.

Thanks for all you do for Engineering and Boeing.