Boeing to Lay Off Hundreds of Workers at Satellite Business
August 24 2015 - 10:00PM
Dow Jones News
Boeing Co. said Monday it had started issuing notices for what
could be hundreds of layoffs at its satellite business, a move it
blamed partly on the stalled reauthorization of the U.S.
Export-Import Bank, which supports many of its sales.
The aerospace giant expects to lay off "several hundred" workers
over the coming months and into early 2016, a company spokesman
said. Boeing last week confirmed it had lost a satellite deal from
Asia Broadcast Satellite because the company couldn't secure
financing.
"While this is not solely being caused by the expiration of
Ex-Im Bank, this is a factor for the customers who have decided to
maybe hit the pause button or look somewhere else," the spokesman
said of the planned job cuts.
Boeing has cut thousands of jobs in its defense arm over the
past four years, citing the impact of Pentagon budget cuts. News of
the layoff plan at the satellite business was reported earlier by
Reuters.
The Ex-Im Bank was closed to new business from July 1 after
Congress failed to reauthorize its charter, curtailing future
financing commitments. The U.S. satellite manufacturing relies
heavily on export financing, accounting for 60% of international
satellite sales.
The credit agency's loans and guarantees are also used by
Boeing's commercial jetliner business and industrial-equipment
manufacturers such as General Electric Co. and Caterpillar Inc.
Boeing declined to say what portion of its satellite business,
which is largely based in Southern California, will be affected by
the cuts.
The spokesman also cited recent rocket-launch failures as
delaying subsequent business and "weak" U.S. Department of Defense
and international spending.
Boeing has been lobbying to put Ex-Im back on the congressional
agenda following the summer recess, raising pressure on lawmakers
to reactivate the bank.
The Boeing spokesman said it wouldn't likely significantly tap
its own commercial-financing organization to save satellite deals.
Boeing's in-house finance arm is primarily focused on civil
aircraft financing deals.
"That is really, really limited," said the spokesman. "We can't
run a healthy business organization if we're suddenly adding large
financing commitments to our portfolio."
Write to Jon Ostrower at jon.ostrower@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 24, 2015 21:45 ET (01:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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