BA Boeing Co

By Andrew Tangel 

Boeing Co. is offering buyout packages to its workforce as the plane maker comes to grips with the coronavirus pandemic's deepening toll on the global aviation industry.

"We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come," Chief Executive David Calhoun said in an internal email outlining the plan to Boeing employees early Thursday. "It's important we start adjusting to our new reality now."

The Chicago-based aerospace giant is the largest U.S.exporter and one of the nation's largest manufacturing employers. It has previously announced steps including a freeze on hiring and overtime as it seeks to preserve cash amid turmoil in the credit markets and a broader economic downturn.

Boeing's airline customers and some of its suppliers have already moved to reduce their labor costs as the pandemic wreaks havoc across the air-travel and aerospace industries. They have announced everything from layoffs to voluntary leave without pay.

In his letter outlining what Boeing calls its voluntary layoff plan, Mr. Calhoun said: "This move aims to reduce the need for other workforce actions."

Boeing hasn't announced any involuntary layoffs in its approximately 160,000-employee workforce, including after cutting and then suspending production of its 737 MAX jet in January and assembly of most wide-body planes last month.

The plane maker employs almost 65,000 people who build commercial aircraft, with an additional 25,000 working in the unit that provides services to airlines.

Executives have said they were seeking to avoid potential layoffs as they sought taxpayer help to ease its financial strain and plan for a recovery.

Mr. Calhoun also reiterated he wanted to maintain an employee base for when the crisis abates. "We can't get back to regular operations again after the crisis if we don't have the people and skills to make that happen," he wrote.

Boeing sought at least $60 billion in government aid for itself, its suppliers and the broader aerospace sector.

The company hasn't said whether it will seek loans under a $2 trillion stimulus package approved in Washington, D.C., last week. Some of the aid would come with restrictions on layoffs.

As the pandemic worsened in March, Boeing suspended its dividend and temporarily halted production at its Everett, Wash., factory.

Its share price doubled last week as investors expected government aid to ease a liquidity squeeze but has fallen sharply in recent days as analysts warned more airlines may seek to cancel orders or be unable to take new planes.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

April 02, 2020 09:50 ET (13:50 GMT)

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