Boeing Softens Layoffs With Early Out Offer
The Boeing Co. announced its first retirementincentive program Friday, hoping to soften the blow for 5,000 workers who received 60-day warnings of possible layoff.
“In a tough situation, this is the best way … to give employees flexibility and give us what we’re looking for” - a smaller work force and lower operating costs, corporate spokesman Chris Villiers said.
The company hoped to mitigate the pain of layoffs and retain the right mix “of youth and experience, people we’ve invested training in,” for when the skidding airline market turns around, he said.
More than 13,000 employees may be eligible for the program. The number of layoffs announced in 60 days “will depend on how many employees take advantage,” Villiers said.
“We know this will not eliminate the need to lay off employees,” he conceded, but it will reduce the number of involuntary layoffs.
The company has forecast a 1995 total of 7,000 layoffs companywide, 6,500 of them in Washington state.
About 4,700 of Friday’s layoff notices went to workers in Washington, with about 150 distributed in Gresham, Ore., 150 in Wichita, Kan., and a few scattered elsewhere, Villiers said. About 20 workers at Boeing’s Spokane fabrication plant were among those receiving notices.
The number of layoff notices was not surprising, said analyst Bill Whitlow with Pacific Crest Securities.
“What is surprising is the early retirement program. It’s the first time Boeing’s ever done it, and as an analyst I view it very positively,” Whitlow said.
The company’s two biggest unions - the Machinists and the Seattle Professional Engineering Employees Association - praised the idea and took credit for suggesting such a program.
“We’ve been considering it for a couple reasons for several weeks,” Villiers said.
Boeing, whose production is keyed to the airline industry, has laid off 48,000 workers since 1989. The company started this year with a work force of 117,331 - 81,964 in Washington. Last month, 927 workers received layoff-warning notices. Villiers said the most recent figure he had for 1995 layoffs was 393 systemwide as of Feb. 9.
“I’d say we have to be real close to the bottom of the cycle” of cuts, Whitlow said.
Employees eligible for the onetime retirement program are mainly those 55 or older who have worked for Boeing at least 10 years, though the company is still discussing the program with affected unions.
Eligible workers signing on for the program will have five years added to their length of service and three years added to their age, Boeing said in a news release.
Enrollment will be allowed between April 14 and June 16. The program is retroactive to Jan. 1 and will cover eligible workers who have retired or been laid off this year.
The plan will be financed through Boeing’s retirement plan and “will not have a significant impact on cashflow projections,” the company said.
But the increase in the plan’s actuarial liability will result in a onetime, second-quarter charge to earnings.
“While the actual number of employees accepting … will not be known until June, an acceptance rate of approximately one-half of the eligible employees would result in a one-time, pre-tax earnings charge of $350 (million) to $400 million,” Boeing said.
Villiers noted those are pre-tax figures, and that “after taxes any loss would be less.”
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