Boeing Co.’s commercial airplane division, already in the midst of cost-cutting measures, on Thursday said it will offer voluntary layoffs to 200 engineering employees at its North Charleston operations.
“We are working hard to meet our business needs and increase our efficiency through a combination of strategies,” Beverly Wyse, vice president and general manager of Boeing South Carolina, told employees in an email. “As part of these broader efforts, a small portion of our team has been identified to participate in the voluntary layoff program.”
This is the first time any layoffs — voluntary or otherwise — have been announced at the company’s North Charleston businesses.
Although 200 workers will be offered the voluntary layoffs, the North Charleston plant is not looking to trim that amount. Affected employees would include engineers at the 787 Dreamliner campus at Charleston International Airport and at Propulsion South Carolina, which makes engine parts for the 737-MAX in Palmetto Commerce Park.
Boeing expects many of the workers who choose the program will be those close to retirement age or those seeking a different job — either within Boeing or elsewhere. The volunteers will receive severance of one week’s pay for each year of employment up to 26 years.
Boeing South Carolina did not specifically say what it would do if the target number of voluntary layoffs is not achieved.
“We continue to take all possible steps to avoid involuntary layoffs,” Wyse said in the message to employees.
Wyse told The Post and Courier in February that she did not anticipate any job cuts at the North Charleston sites because of increased workload.
Boeing plans to increase production of the 787 Dreamliner to a dozen a month from 10 this summer, split between the North Charleston campus and a West Coast plant in Everett, Wash. Also, the first 787-10 — a simple stretch of the 787-9 — is scheduled to hit final assembly in October. It will be built exclusively in North Charleston.
Ray Conner, CEO of Boeing Commercial Airplanes, said in February that the company needs to cut costs because of competition with Airbus. The France-based rival is in a price war with Boeing and has been taking greater market share in the single-aisle and twin-aisle segments. Boeing has said it plans to eliminate at least 4,000 jobs companywide, most of them in Washington state.
Part of those job cuts involve reorganization or consolidation of the company’s airplane engineers, according to a Reuters report that cited an internal Boeing memo. The company, according to the report, also said it did not plan to replace higher-level employees who leave, except in rare situations.
Boeing’s South Carolina operations have bucked the companywide trend so far this year.
As of March 31, Boeing employed 8,265 people at its South Carolina facilities, according to the company’s website. That was an increase of 76 from the previous month and 598 more workers than the year-ago total. The company doesn’t break out the number of contractors it hires. Companywide, employment levels at Boeing’s commercial airplane division have fallen 1.4 percent since last year — to 82,127 employees from 83,270 employees.
Thursday’s news about voluntary layoffs comes the week before Boeing is set to release its first-quarter financial results. It also follows a report Wednesday by an analyst who downgraded Boeing ’s stock to “underperform,” saying the company has little chance of fully recovering the almost $29 billion it has spent producing the 787. Ron Epstein, an analyst at Bank of America Corp., said Boeing is on target to make less than half of the money it needs to pay down the production costs by the company’s target date of 2022.
Bloomberg reported in February that the U.S. Securities and Exchange Commission is investigating Boeing’s forecasts regarding the profitability of the Dreamliner and the 747 jumbo jet.
Through April 12, the most recent data available, there has been one order in 2016 for a Dreamliner plane. That order is countered, however, by four cancelled orders. Boeing has a backlog of more than 700 unfilled orders for Dreamliner planes.
Reach David Wren at 843-937-5550.
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