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Boeing is cutting around 2,500 jobs from its Commercial Airplanes division as it struggles with supply chain issues.
The planemaker is set to reduce its Commercial Airplanes workforce by around five per cent starting in December, with its plan to ramp up manufacturing of 737 MAX aircraft hampered by “slower than expected” wing production at its Renton factory.
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It comes as Virgin Australia has revised the expected delivery of its first 737 MAX 10 from next year to mid-2028.
“Adjusting our production schedules and reducing aircraft output puts us in an overstaffed position,” said Boeing’s head of commercial airplanes, Stephanie Pope, in an internal memo.
“Unfortunately, that means we need to align our staffing levels to our revised business plan, resulting in a reduction of approximately five per cent through a combination of attrition and involuntary layoffs, with notifications beginning in December.”
Speaking to investors on an earnings call in September, Boeing CEO Kelly Ortberg said the company is “continuing to work towards stabilising production at 47 [737] airplanes per month”, and the time frame for ramping up to 52 per month has been pushed back to late 2027.
“We’re making progress, but we still have more work to do, and I’m expecting it will take us into next year to get fully stable at this rate,” he said.
“Our output of wings is improving, but we need to demonstrate sustained performance at this level and ensure we have a high confidence plan to step up to rate 52 when the system is ready.
“To reach 52 aircraft per month, we have to get the Northline certified and producing, our back shops, including wings stable and ready and fuselages in Wichita stable at the higher rates.
“Taken together and integrating our learning from this year, our financial plan will target rate 52 in the back half of 2027. And as I’ve said many times before, it’s more important that we do this ramp right than what particular month we achieve a rate break, and we’ll stay disciplined here.”
Boeing says its current commercial airplanes backlog stands at more than 6,300, valued at US$612 billion. The planemaker earlier this year received regulatory approval for both its 737 MAX 7 and 737 MAX 10 aircraft.
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