Boeing Co (NYSE:BA) Reduces Monthly Production Of 787 Dreamliner To Six From Ten Amid Weak Demand: Stops Production At Everett, Washington
Boeing Co (NYSE:BA) decided to reduce the production of wide-bodied 787 Dreamliner amid weak international travel demand. The company said it plans to consolidate the production of 787 at its North Charleston, South Carolina, during mid-2021.
The demand for international travel is reduced significantly because of the ongoing coronavirus impact compared to domestic travel. Therefore, the market for wide-bodied aircraft is diminished worldwide.
Affects the jobs of 70,000 employees
With Boeing’s decision to shut down production of 787 Dreamliner at Everett, Washington, 70,000 employees are affected. The South Carolina facility employs just 7,000 people. Boeing decided to minimize costs and run the business.
Rick Larsen says the decision of Boeing is shortsighted
Rick Larsen, Chairman of the House Subcommittee (aviation) said Boeing’s decision to pull the production of 787 out of the Washington State is misplaced and shortsighted. He vowed to fight to bring back the production of 787 to Everett when the economy rebounds.
Boeing adopted cost-cutting measures amid the recent fatal crashes of 737 Max besides the globally dismal demand for air travel. At the beginning of 2020, the company announced plans to lower its workforce by 10%.
CEO of the commercial unit at Boeing, Stan Deal, said the company decided to consolidate its manufacturing of 787 at South Carolina after a thorough and detailed study. The company said the North Carolina is established to manufacture the largest model – 787-10 in the Dreamliner series.
Reacting to Boeing’s decision to shift the production of 787 to South Carolina, Jay Inslee, the governor of Washington State, said the favorable tax treatment offered to the company needs a review. The Democrat, Inslee, said the State is committed to providing support for the workers and those companies. Therefore, it necessitates the review of partnership and tax treatment because Boeing decided to move the 787 series production to South Carolina.
Inslee seeks to revoke tax breaks of over $100 million offered annually to Boeing. According to Inslee, Boeing received the state aid of around $2.2 billion in developing the Dreamliner. He said Boeing should rethink its strategy and not just one way.