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Boeing Implements New Wave Of Downsizing and Job Cuts: But Will Increased Defense Spending Compensate?

boeingAfter 32 years at Boeing, engineer Dave Baine of Federal Way will be leaving the company in April. He was already preparing to retire when the Aerospace giant sealed the deal by offering him a buyout on his job last week.

“It’s better than a gold watch,” Baine said with a smile. The buyout package includes 6 months’ pay in a lump sum, plus extended health insurance. “It’ll help the younger folks that want to stick around and help some of the older folks exit quickly and quietly,” he added.


Boeing is the single largest exporter in the U.S., and was one of the corporate sponsors of last Friday’s inauguration of President Donald Trump. Its actions in January signal what may be a defining trend for the Boeing in the Trump era: buyouts and layoffs.

The recent developments come in the wake of nearly 11,000 job cuts across Boeing last year, according to union figures.

The company’s PR department did not disclose any specific target for job cuts over the coming year. But much of the downsizing has come from the commercial jetliner workforce in western Washington state. While Boeing has a large number of planes on order, new jet sales are slowing. And with countries like Canada, Brazil and China getting into the game, there will be increased competition and pricing pressure in the years ahead.

Aviation analyst Richard Aboulafia noted, “We’re not seeing any evidence of a serious downturn, but there’s just a lot more risk of a downturn materializing.”

Aboulafia sees Boeing as becoming a prime target that will be in the spotlight under President Trump. The incoming administration could create both new risks and opportunities. “Anything that caused any kind of trade ruckus, particularly with China, … would be very bad news,” Aboulafia says.

But on the other hand, the possibility of increased military spending could boost revenue for major defense contractors like Boeing. New fighter jets, coupled with multibillion dollar contracts to replace the aging Air Force One jumbo jets spurred a second face-to-face meeting between Trump and Boeing CEO Dennis Muilenburg, who left Trump Tower last week feeling “very encouraged.”

“We’re all on the same page here. Our objective is to provide the best capability for our country most affordably. We want to generate jobs in the U.S.,” Muilenburg said.

Trump declined to speak with reporters after last week’s meeting with Boeing. But he has been candid about his strategy of pushing for cost concessions. “It’s a dance,” is how Trump put it after a Twitter jab and an initial meeting with the Boeing chief right before Christmas.

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