Boeing lays off approx 30,000.
September 18, 2001 9:04 PM Subscribe
Boeing lays off approx 30,000. Wow...in my neck of the woods, this is a big deal. Combined with yesterday's stock losses, and potential airlines bailout.... (more inside)
actually, I saw the...whatsis...where the guy talks in front of the press...bleh...my brain just melted.
he said they had been planning to produce 510+ planes next year, and would be making something like 400...this after talking to their various customers.
yeah, I know they've been downsizing. my part-time assistant is a former Boeing welder. but this is a lot more than anybody would've expected, I think. 20-30% of commercial airlines workers? jeez.
and the airlines are talking about laying off 10s of thousands of people. of course, everybody seems to want the gov't to help. bailouts a go-go, and everybody gets to blame it on those durn terrorists.
sorry...my conspiracy/cynicism meter is running a little high today.
posted by epersonae at 9:14 PM on September 18, 2001
he said they had been planning to produce 510+ planes next year, and would be making something like 400...this after talking to their various customers.
yeah, I know they've been downsizing. my part-time assistant is a former Boeing welder. but this is a lot more than anybody would've expected, I think. 20-30% of commercial airlines workers? jeez.
and the airlines are talking about laying off 10s of thousands of people. of course, everybody seems to want the gov't to help. bailouts a go-go, and everybody gets to blame it on those durn terrorists.
sorry...my conspiracy/cynicism meter is running a little high today.
posted by epersonae at 9:14 PM on September 18, 2001
I understand the airlines were put into an awful situation but I still have some issues:
1. 5 days of inoperation could lead to their complete ruin? (I have no experience running a corporation but this seems like poor planning)
2. Could any of these CEOs cut their salaries some so a few people could keep their jobs? Even as a symbolic gesture.
3. Will this bailout solely go to helping the companies, or will any sort of severance, etc. be paid to the people laid off?
4. What is the re-payment schedule? Shouldn't some safety-requirements legislation strings be attached (I don't blame them for what happened, but more secure airlines couldn't hurt)?
posted by owillis at 9:15 PM on September 18, 2001
1. 5 days of inoperation could lead to their complete ruin? (I have no experience running a corporation but this seems like poor planning)
2. Could any of these CEOs cut their salaries some so a few people could keep their jobs? Even as a symbolic gesture.
3. Will this bailout solely go to helping the companies, or will any sort of severance, etc. be paid to the people laid off?
4. What is the re-payment schedule? Shouldn't some safety-requirements legislation strings be attached (I don't blame them for what happened, but more secure airlines couldn't hurt)?
posted by owillis at 9:15 PM on September 18, 2001
2 and 3 would require the CEOs to have a heart, wouldn't it?
Well, they've still got 1 and 4 to answer to.
posted by BarneyFifesBullet at 9:25 PM on September 18, 2001
Well, they've still got 1 and 4 to answer to.
posted by BarneyFifesBullet at 9:25 PM on September 18, 2001
I think the boeing cuts are very different than the airlines themselves making cutbacks... I mean, the airlines were directly effected. But Boeing shouldn't have been... This must have been something that was in the works for a while.
Unfortunately, last time there were massive layoffs at Boeing, Seattle (and the northwest in general) underwent a large recession. This makes me very nervous...
posted by daver at 9:47 PM on September 18, 2001
Unfortunately, last time there were massive layoffs at Boeing, Seattle (and the northwest in general) underwent a large recession. This makes me very nervous...
posted by daver at 9:47 PM on September 18, 2001
It's not WTC-related, but the airline industry here in Australia is pretty screwed too. One of our major airlines (we really only have - had - two, three if you include Virgin) has just failed. It did so last Wednesday or Thursday -- pushed the US off the top news spot by the end of the day. Around 16,000 jobs have been lost just at the airline -- there's also subsidiaries, travel places and holiday locations ("there were 3,500 bed cancellations in Melbourne in one day"). Also, "About 2,000 Australian holiday makers have been stranded on ... Bali".
It's so bad that the Aussie dollar has fallen to new lows against the US dollar -- mind you, anything happens anywhere in the world and the Aussie dollar falls.
Tough times ahead, economically.
posted by krisjohn at 10:05 PM on September 18, 2001
It's so bad that the Aussie dollar has fallen to new lows against the US dollar -- mind you, anything happens anywhere in the world and the Aussie dollar falls.
Tough times ahead, economically.
posted by krisjohn at 10:05 PM on September 18, 2001
owillis: excellent questions.
I'll bet you anything this money goes to run the business and not to the workers. I'd like to see a few CEOs take a pay cut. it will be infuriating if *any* of these CEOs gets a bonus at the end of the year after all of this. (there should be a rule that if you lay of more than a certain percentage of your workforce, you're not allowed to get a bonus).
except for #4. repayment? aren't these monies gifts from the government to the airlines? or did you mean pay-out schedule?
posted by rebeccablood at 10:22 PM on September 18, 2001
I'll bet you anything this money goes to run the business and not to the workers. I'd like to see a few CEOs take a pay cut. it will be infuriating if *any* of these CEOs gets a bonus at the end of the year after all of this. (there should be a rule that if you lay of more than a certain percentage of your workforce, you're not allowed to get a bonus).
except for #4. repayment? aren't these monies gifts from the government to the airlines? or did you mean pay-out schedule?
posted by rebeccablood at 10:22 PM on September 18, 2001
I'm worried too. Not so much about Boeing (whose problems are largely unrelated to 9.11), and not so much about other industries and services which must absorb the first obvious wave of negative economic energy; instead, I worry about a decline in the 'freedom to be frivolous' index.
Much of our economy is based on an unspoken faith in steady-state opulence and the decadence it annoints. We gotta be able to buy and appreciate the 'fun stuff' on impulse and without guilt. IOW, we need Britney's navel. The 'pop' in our culture is fun, and Americans are good at it - it's one of our largest exports. Shallow as it may sound, I'd hate for us to lose our ability to manufacture and maintain it.
posted by Opus Dark at 10:30 PM on September 18, 2001
Much of our economy is based on an unspoken faith in steady-state opulence and the decadence it annoints. We gotta be able to buy and appreciate the 'fun stuff' on impulse and without guilt. IOW, we need Britney's navel. The 'pop' in our culture is fun, and Americans are good at it - it's one of our largest exports. Shallow as it may sound, I'd hate for us to lose our ability to manufacture and maintain it.
posted by Opus Dark at 10:30 PM on September 18, 2001
rebecca: the article said "$12.5 billion in loan guarantees" are these loans, or just loan backups? Maybe I jumped the gun. I'm not familiar with this stuff, so...
posted by owillis at 10:45 PM on September 18, 2001
posted by owillis at 10:45 PM on September 18, 2001
It sure smells like a scam to me- Boeing lays off all these jobs, claims the sky is falling, gets government bailout to the tune of billions, then when the sky doesn't fall (because air travel will only let up for a while) and plane orders come in as normal, Boeing can hire back those workers for the production needs that never disappeared- perhaps fewer than before, getting those to work twice as hard (making more mistakes) knowing they could "lose their jobs" unless their union is ferociously strong. Meanwhile, Boeing pockets the profits from having no payroll for those 20-30K for a while, as well as any gov't bailout moneys- CEO and BoD get big bonuses. Wahoo!
People don't buy planes for a 1-week turnaround; the plane orders being filled now- because obviously planes are being built all the time- came in year(s) ago, and those orders that would be coming in now had this WTC thing not happened will probably still come in- because those needing airplanes in 2 years won't realistically expect air travel will be slumped that long from now! Besides, Boeing has remade itself in the past few decades into as much a defense contractor as a commercial jet airliner manufacturer- they don't just make 7x7s anymore. Cutting 30% of their jet staff is almost like saying they expect NO new jet business.
Yep, it smells like a scam- one that will work, of course. CEOs and Boards of Directors can ALWAYS outlast people on 6 months' of unemployment, after which those people will agitate for the gov't to "do something" to get their jobs back, such as I don't know bail out Boeing et al so they can rehire those positions. No idea about that $12.5B "loan guarantee"- temporary tax payment delays or even cash bailouts for lost business, but "loan guarantee" is the kind of nebulous thing off which fortunes are made. Regardless, the airlines are slashing tens of thousands of jobs as well- after one week!! Bullshit, folks, absolute bullshit. Of course fewer people will fly in the weeks following a WTC- but they won't stay away forever, people still need to get places. Cutting all that staff, though, will do wonders for security and service at the check-in counter, in the departing gates, and on the planes themselves (where it seems we'll now have fewer staff to deal with the same cramped in passengers. Just beautiful).
posted by hincandenza at 11:11 PM on September 18, 2001
(there should be a rule that if you lay of more than a certain percentage of your workforce, you're not allowed to get a bonus)
What there should be is a law attached to minimum wage that also specifies maximum wage as a percentage of an organisation's lowest paid workers. That is to say that the CEO shouldn't be able to earn more than, say, 10 times what the cleaners and mail-room workers earn.
posted by krisjohn at 11:33 PM on September 18, 2001
What there should be is a law attached to minimum wage that also specifies maximum wage as a percentage of an organisation's lowest paid workers. That is to say that the CEO shouldn't be able to earn more than, say, 10 times what the cleaners and mail-room workers earn.
posted by krisjohn at 11:33 PM on September 18, 2001
Tell you what I think. They better use those bailouts to buy themselves a coupla air marshalls, they better.
posted by mirla at 11:48 PM on September 18, 2001
posted by mirla at 11:48 PM on September 18, 2001
A corporation's profits are the property of the owners. Unamazingly enough, a corporation run by highly competent executives will make mega-millions more than one run by janitors. Therefore, competent executives generate mega-millions of dollars for their employers. What is that worth? Here's a novel idea. How about the owners (stockholders) of the corporation decide?
Oh, that's the way it works now.
Never mind.
P.S: I'm against bailouts as well. No-one comes and bails me out if I can't pay the bills. Find a buyer or go bankrupt.
posted by marknau at 11:54 PM on September 18, 2001
Oh, that's the way it works now.
Never mind.
P.S: I'm against bailouts as well. No-one comes and bails me out if I can't pay the bills. Find a buyer or go bankrupt.
posted by marknau at 11:54 PM on September 18, 2001
I'm surprised. I would have thought more security = fewer flights = bigger planes.
posted by username at 1:55 AM on September 19, 2001
posted by username at 1:55 AM on September 19, 2001
right on track owillis and rcb.
The airlines have been in trouble for quite some time now. I don't see how this was any different than a very bad winter storm for them. What was it 2-3 day with no flights? With this tragedy they saw their opening to get into the govs pockets.
Before we hand over any money CEO HAVE to take a paycut. They obviously can't run their companies to well, why pay them?
posted by monkeyboy at 3:40 AM on September 19, 2001
The airlines have been in trouble for quite some time now. I don't see how this was any different than a very bad winter storm for them. What was it 2-3 day with no flights? With this tragedy they saw their opening to get into the govs pockets.
Before we hand over any money CEO HAVE to take a paycut. They obviously can't run their companies to well, why pay them?
posted by monkeyboy at 3:40 AM on September 19, 2001
> airlines bailout....
An airliner that makes it possible for passengers to bail out (maybe popped out in sleeping tubes like launching torpedoes?) would be interesting.
> the CEO shouldn't be able to earn more than, say, 10
> times what the cleaners and mail-room workers earn.
The bastards with the best lawyers would always find a way around it. CEOs would end up taking token salaries but getting huge awards in forms that were not salary in terms of taxation and so on.
But say it worked the way you intend it to work: I would see about going into the broom-pushing business.
posted by pracowity at 4:33 AM on September 19, 2001
An airliner that makes it possible for passengers to bail out (maybe popped out in sleeping tubes like launching torpedoes?) would be interesting.
> the CEO shouldn't be able to earn more than, say, 10
> times what the cleaners and mail-room workers earn.
The bastards with the best lawyers would always find a way around it. CEOs would end up taking token salaries but getting huge awards in forms that were not salary in terms of taxation and so on.
But say it worked the way you intend it to work: I would see about going into the broom-pushing business.
posted by pracowity at 4:33 AM on September 19, 2001
Unamazingly enough, a corporation run by highly competent executives will make mega-millions more than one run by janitors.
highly competent is a highly subjective phrase. ;)
even with subjectivity in mind, how many of these executives are highly competent? how many of these guys still make the big money and the big bonuses and the big stock options when the companies perform poorly? dot-com meltdown, dot-com meltdown.
posted by bakiwop at 5:42 AM on September 19, 2001
highly competent is a highly subjective phrase. ;)
even with subjectivity in mind, how many of these executives are highly competent? how many of these guys still make the big money and the big bonuses and the big stock options when the companies perform poorly? dot-com meltdown, dot-com meltdown.
posted by bakiwop at 5:42 AM on September 19, 2001
2. Could any of these CEOs cut their salaries some so a few people could keep their jobs? Even as a symbolic gesture.
Filthy communist ;-)
posted by walrus at 6:22 AM on September 19, 2001
Filthy communist ;-)
posted by walrus at 6:22 AM on September 19, 2001
Yup, sounds like a bogus excuse, or that the management is really bad at managing the company. Five days should not ruin a healthy company in such a drastic manner. It would be downright unsavory for a company to capitalize on a downsizing by blaming it on a convenient excuse in which thousands of people died.
posted by fleener at 7:08 AM on September 19, 2001
posted by fleener at 7:08 AM on September 19, 2001
There will be calls for a gov't bailout for Boeing, as there have been for the airlines and there will be for others that get whacked as a result of 9.11.01.
However, wouldn't it be smart to at least put some of the bailout fund into (for example) rebuilding our railroads? A few billion could build a lot of high-speed passenger rail line. Washington-Boston is being upgraded already, maybe Chicago-NY should be the next, etc.
Trains are far more efficient than planes, energy-wise, with the additional wait times factored in, they can be just as quick on medium distances, and you can't hijack a train and drive it into a building.
In fact, with their technical and operational expertise, there is no reason Boeing and the airlines couldn't get into the rail transport business themselves, and should be required to do so with some of the bailout dough.
posted by beagle at 7:17 AM on September 19, 2001
However, wouldn't it be smart to at least put some of the bailout fund into (for example) rebuilding our railroads? A few billion could build a lot of high-speed passenger rail line. Washington-Boston is being upgraded already, maybe Chicago-NY should be the next, etc.
Trains are far more efficient than planes, energy-wise, with the additional wait times factored in, they can be just as quick on medium distances, and you can't hijack a train and drive it into a building.
In fact, with their technical and operational expertise, there is no reason Boeing and the airlines couldn't get into the rail transport business themselves, and should be required to do so with some of the bailout dough.
posted by beagle at 7:17 AM on September 19, 2001
> there is no reason Boeing and the airlines couldn't get
> into the rail transport business themselves
I wish they would.
posted by pracowity at 7:55 AM on September 19, 2001
> into the rail transport business themselves
I wish they would.
posted by pracowity at 7:55 AM on September 19, 2001
When I heard the news about Boeing last night on the news, the anchor closed with the news that the company is expected to be awarded a $200 billion military contract in the coming months. (That seems like a lot of cash now that i think about it, so maybe it was $200 million, but anyway...)
I'm really proud that my hometown put on such a great dog-and-pony show so we could lure these fine corpoate citizens to the Windy City.
posted by alexg23 at 8:33 AM on September 19, 2001
I'm really proud that my hometown put on such a great dog-and-pony show so we could lure these fine corpoate citizens to the Windy City.
posted by alexg23 at 8:33 AM on September 19, 2001
A family friend just told me that she had a trip planned for this weekend. NY to Florida, I believe. When she called the airline, they actually told her she should probably just cancel. They gave her a list of the most inconvenient possible times she could fly, and that she would be better off canceling the trip.
My conspiracy prone mind finds this very interesting.
posted by Doug at 8:51 AM on September 19, 2001
My conspiracy prone mind finds this very interesting.
posted by Doug at 8:51 AM on September 19, 2001
I am very disappointed that Boeing is using a national tragedy as an excuse for laying off so many workers. The reason they moved HQ to Chicago and transformed into a "global" company is because they wanted to detach themselves from Seattle and save themselves the embarassment of laying off so many "local" folks.
posted by nathanc at 9:29 AM on September 19, 2001
posted by nathanc at 9:29 AM on September 19, 2001
My understanding is that the airlines have typically run with almost no cash reserves. Flight schedules are so predictable and the predictions of who will fly where precise enough that, barring massive disasters, they can keep a thin skein of profit running over their operating costs.
Planes grounded for 2-3 days and half-full for weeks is a massive disaster. Conspiracies are not absolutely everywhere.
By the way, the effect of the attacks doesn't just affect Seattle, or even just the U.S. Look who else will take a serious blow: the reinsurance companies in Bahrain. They, too, would rather have this as a war than as a crime.
posted by argybarg at 9:32 AM on September 19, 2001
Planes grounded for 2-3 days and half-full for weeks is a massive disaster. Conspiracies are not absolutely everywhere.
By the way, the effect of the attacks doesn't just affect Seattle, or even just the U.S. Look who else will take a serious blow: the reinsurance companies in Bahrain. They, too, would rather have this as a war than as a crime.
posted by argybarg at 9:32 AM on September 19, 2001
what with the .com bust and now this...
I'm thinking there will be some cheap property in Seattle within a year.
Thoughts?
posted by TiggleTaggleTiger at 9:56 AM on September 19, 2001
I'm thinking there will be some cheap property in Seattle within a year.
Thoughts?
posted by TiggleTaggleTiger at 9:56 AM on September 19, 2001
How about the owners (stockholders) of the corporation decide?
Oh, that's the way it works now.
Didn't we talk about that here? Oh, we did.
posted by holgate at 10:20 AM on September 19, 2001
Oh, that's the way it works now.
Didn't we talk about that here? Oh, we did.
posted by holgate at 10:20 AM on September 19, 2001
Here in the Detroit area, the news is all about the sharp drop in auto sales, which, of course, will mean big layoffs here, too, in the not so distant future. And there has already been at least one round already.
My question is, if Americans are being asked to suck it up and make sacrifices--and many of them are going to be called into the armed services--why can't our corporations do the same?
posted by danr at 10:24 AM on September 19, 2001
My question is, if Americans are being asked to suck it up and make sacrifices--and many of them are going to be called into the armed services--why can't our corporations do the same?
posted by danr at 10:24 AM on September 19, 2001
holgate: Tangentially discussed, it seems. But still, thanks for the link. The information is interesting and informative, but you must keep 2 things in mind when drawing conclusions:
1) The boards serve at the pleasure of the owners of the company. The reason there is so much cross-over is because the owners decide to do it that way. It actually makes sense to re-use proven people as often as you can.
2) These people are, by and large, doing their job. Shareholder value has increased for the vast majority of companies. No, they're not perfect. Sorry, this is not Utopia. But I still remember when Reagan took office and the Dow was under 1000. Corporations are building wealth.
The dot-coms were an aberrant case that purposefully didn't follow the standard business models. That was pure Tulip Mania.
posted by marknau at 10:47 AM on September 19, 2001
1) The boards serve at the pleasure of the owners of the company. The reason there is so much cross-over is because the owners decide to do it that way. It actually makes sense to re-use proven people as often as you can.
2) These people are, by and large, doing their job. Shareholder value has increased for the vast majority of companies. No, they're not perfect. Sorry, this is not Utopia. But I still remember when Reagan took office and the Dow was under 1000. Corporations are building wealth.
The dot-coms were an aberrant case that purposefully didn't follow the standard business models. That was pure Tulip Mania.
posted by marknau at 10:47 AM on September 19, 2001
marknau: The reason there is so much cross-over is because the owners decide to do it that way.
Um... I'm no economist, but isn't a true capitalist system supposed to enshrine the notion that no individual [monopoly] or small group [cartel, oligopoly] should be able to control the market or dictate market forces? Isn't that part of the 'invisible hand'? So am I just way behind the Economics curve, or has this notion been abandoned not just in practice but in bookish theory as well? Because it would seem to my naive little mind that if there's so many interlocking directorates for so many different companies, then we don't have a free market any more. And you've still sidestepped the Golden- Parachutes- for- CEOs- and- BoDs- that- ran- a- company- into- the- ground- like- any- janitor- could- have- done issue.
But I still remember when Reagan took office and the Dow was under 1000. Corporations are building wealth.
Those two statements are non sequitors, no? Because raising the Dow average doesn't build wealth, it simply raises the Dow average- kinda like an IQ test doesn't test intelligence, it tests your ability to take IQ tests. And when Reagan took office, the Dow was around 800-100; when he left, it was what, 1500-1700? Ah, but how was the economy as a whole doing- because since 1929 and before 1989, there were other times when the economy was quite solid and productive, yet the Dow didn't even near 600! Tulip mania or not, if we're going to play the Dow average game as some kind of direct economic indicator of "building wealth", then it's not Reagan but Clinton you should be praising from the hilltops.
posted by hincandenza at 11:29 AM on September 19, 2001
The fact that the same person sits on the boards of Kmart, Texaco, and Georgia Pacific is completely uninteresting from a cartel angle. They do not compete with one another. The corporations actually in competition with one another still compete.
Even if everyone does their job, some companies will fail. This is not Utopia. Talented people can make demands that will be met, because otherwise they will go elsewhere. So a CEO can demand a package that includes a large sum even if the company fails, just as Barry Bonds can demand a huge salary even if he subsequently goes on to bat .220 for a season.
Reagan was mentioned as a historical marker. The discussion of what caused the economic growth from 1982 on is a separate discussion. Email me if yer interested in talking about that.
The DJIA is one indicator of the value of companies. The job of company executives is to create profit and value for the shareholders. The fact that the Dow has gone from sub-1000 to 8000+ in 20 years is an indication that executives have done that job quite well on average.
posted by marknau at 12:56 PM on September 19, 2001
Even if everyone does their job, some companies will fail. This is not Utopia. Talented people can make demands that will be met, because otherwise they will go elsewhere. So a CEO can demand a package that includes a large sum even if the company fails, just as Barry Bonds can demand a huge salary even if he subsequently goes on to bat .220 for a season.
Reagan was mentioned as a historical marker. The discussion of what caused the economic growth from 1982 on is a separate discussion. Email me if yer interested in talking about that.
The DJIA is one indicator of the value of companies. The job of company executives is to create profit and value for the shareholders. The fact that the Dow has gone from sub-1000 to 8000+ in 20 years is an indication that executives have done that job quite well on average.
posted by marknau at 12:56 PM on September 19, 2001
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posted by tamim at 9:07 PM on September 18, 2001