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Introduction

Feb. 11, 2016, © Leeham Co. The news yesterday that Boeing is undertaking a new round of cost-cutting has been buzzing around management and labor circles for months.

LNC last year began hearing management at Boeing Commercial Airplanes would likely face personnel cuts of 10% to 15%. Cuts were expected within the marketing/sales departments, in part due to struggling sales of the 7-Series airplanes, sources told LNC.

The leading labor unions, SPEEA (engineers) and IAM 751 (touch labor), each told LNC last year they expected workforce layoffs were in the future.

More ominously, a consultant who occasionally worked with Boeing, told LNC that the elevation of Dennis Muilenburg from president and chief operating office to president and CEO (and, eventually, chairman) would make former CEO Jim McNerney’s cost- cutting efforts pale by comparison.

Summary

• Major layoffs predicted at Boeing’s Share Services Group.
• Work continues to be shifted out of Washington State.
• Large number of retirements at IAM and SPEEA expected by year end.
• Airbus pricing pressure, 787 deferred production costs, commitments to shareholders and 777X squeeze cash flow.
• “Mac the knife.”

Discussion