Aerospace manufacturer also announces layoffs of around 150 Puget Sound employees, but not all will be terminated.
Boeing Inc.’s (NYSE:BA) CEO, Jim McNerney, has appealed to lawmakers in Congress to keep the funding to US Ex-Im Bank ongoing, or face the risk of many manufacturing and engineering jobs relocate elsewhere. The bank’s current funding is scheduled to end by the start of July.
Mr. McNerney has stated his intentions to keep the US-based manufacturing and engineering stay, but points to the difficulties that it would face in financing its customers for their aircraft purchases. It would result in a significant “competitive dislocation”.
If the funding discontinues, the impact will be very large. About 165,000 engineering and manufacturing jobs in the United States, along with some 1.5 million jobs in the company's supply chain, could also be at risk if U.S. credit support ceased.
The debate surrounding Ex-Im Bank is Republicans accusing the bank of usurping the role of the private sector and favors a selective to cater to the wellbeing of the big businesses. Ex Im Bank has also come under fire from leading American carriers, such as Delta, American Airlines, etc., accusing them of financing Boeing aircraft purchases of its competitors, especially Emirates and Qatar Airways, which the trio are currently engaged in a feud regarding the yet unproven claims of subsidies being provided by the Gulf governments. Therefore, some conservative Republicans and US carriers are in favor for the export credit agency to “die”.
Mr. McNerney says that this debate is already starting to have an effect with Boeing’s competitors pitching in customers by telling them that U.S. export credit support is not dependable and they are better off seeking credit financing from their export credit agency.
Amidst all this debate, Boeing has announced that it will lay off more than 150 employees from its Commercial Aircraft Division in the Puget Sound region. The layoffs will be spread from Renton to Seattle. Not all laid off employees will be terminated.
Employees switch between positions or locations within the company, while others retire, and the rest stop working for the company entirely. It is not linked to the prospect of US Ex-Im Bank being possibly near its expiration, as these layoffs had been in the planning for quite some time, and has been on a continuous trend for a few years.
The company has been pressing its suppliers to lower down its costs in the face of tough competition for Boeing, despite the ever-expanding travelling market.
Boeing stock price ended the day at $149.87, less than 0.90% drop.
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