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Boeing on Monday told its satellite workers that it will eventually lay off hundreds because of lost contracts due to the failure of Congress to renew the Export-Import Bank.
Boeing Co (BA.N) on Monday told its workers that it expected to cut as many as “several hundred” jobs in its satellite business through the end of 2015 due to a downturn in U.S. military spending and delays in commercial satellite orders. Multiple commercial orders were being delayed by recent failures of launch vehicles and uncertainties about the future availability of financing from the U.S. Export-Import Bank, whose government charter lapsed on June 30, the company told key managers in an internal communication.
Boeing spokesman Tim Neale confirmed the reductions and said the total number of people affected would be finalized in coming months. Some could find work in other parts of Boeing, he said. [emphasis mine]
This announcement is pure lobbying, no more. They might have to lay off workers, but they haven’t done it yet, and when they do the numbers are likely to be far less than they are implying. And even so, the layoffs will probably be good for the company, making it more lean and efficient.
The reason they have made this public now is to generate support for a renewal of the Export-Import Bank, which Congress allowed to expire last month. Boeing wants it back, because the company uses the low interest loans it provides (using government money) to get contracts abroad. However, they really don’t need it to do that. They could trim costs, work more efficiently, and get loans in the private sector, as every other private company is expected to do.
This announcement is really no different than the doom that was predicted prior to the arrival of sequestration. Those budget cuts were going to cause the destruction of the defense industry and the American military, while causing the airline industry to collapse because the TSA and the FAA wouldn’t have the staff to keep the planes in the air. Twas all a lie. Nothing happened, and by some miracle the government still had plenty of cash to keep things running smoothly. Similarly, Boeing can compete without the help of the government. They just have to stop whining and do it.