Long-term outlook for Boeing looks strong, despite layoff announcement
20-year market outlook predicts $6.1 trillion market
Boeing South Carolina announced its first involuntary layoffs last week – its first since opening for business in 2011. The company also issued its annual 20-year Current Market Outlook (CMO) last week, a forecast that predicts a $6.1 trillion global market.
On Friday, June 23, fewer than 200 employees at Boeing’s South Carolina operation received involuntary layoff notices. These layoffs will affect: operations management; engineering, both management and non-management; quality managers, quality systems specialists and quality production specialists; industrial engineering; staff analysts and office administrators; and training.
Boeing predicts in the newly-released CMO that demand for new jets will reach 41,030 over the next 20 years, worth approximately $6.1 trillion. But, company leaders have said that the layoffs in South Carolina are necessary in the Commercial Airplanes division to boost competitiveness with rival Airbus and to cut production costs.
The CMO is a guide for analysts and investors, offering context to its development programs and strategic planning, and detailed forecasts for demand by model and geographic region.The wide-body jet forecast in the CMO calls for 9,130 new aircraft to address a “large wave of potential replacement demand beginning early in the next decade.” Boeing’s 787 and 777 series jets serve this segment.
This projected demand in wide-body jets is good news for the future of Boeing’s North Charleston operation, where all three models of the 787 Dreamliner are built, interior components for the 787 are produced, and engine parts for the 777X are made.
Boeing South Carolina employed 7,379 people as of May 25 and had only voluntary layoffs prior to the recent announcement. Two hundred workers received voluntary notices in April 2016 and 600 received voluntary notices in January.
Vice President and General Manager of Boeing South Carolina Joan Robinson-Berry said the manufacturer has worked to mitigate the number of job cuts by bringing additional work to the site, offering voluntary layoff packages and filling open positions from within.