Boeing's Big Shift: Layoffs After Lavish Spending

Boeing, the world-famous plane manufacturer, has hit a rough patch. The company's new CEO, Kelly Ortberg, has announced that about 10% of the workforce will be laid off in the coming months. This news has sparked conversations about the company's past spending habits. Between 2010 and 2019, Boeing spent a whopping $68 billion on stock buybacks and dividends. These are payments made to shareholders to boost the company's stock price. Critics argue that this lavish spending shows that Boeing's claims of needing to cut jobs and reduce worker pay are not true. Les Leopold, who leads the Labor Institute, has a strong opinion on this. He said, "Boeing became a manufacturer of stock buybacks, not just planes." He believes that companies often use layoffs as a quick fix for their problems. He thinks that stock buybacks and layoffs are linked, and that both should be banned. Leopold has suggested that Vice President Kamala Harris should promise that taxpayer money won't go to companies that lay off workers and do stock buybacks. In 2022, Boeing received nearly $15 billion from the Pentagon.

Ortberg took over as Boeing's CEO in August, following a safety scare where a door plug fell off a Boeing plane mid-flight. In a message to employees, Ortberg said that Boeing will delay a new jet and stop making one of its freighter models. He also said that the company needs to cut jobs to match its financial situation and focus on its priorities. This is a polite way of saying that mass layoffs are coming. Ortberg admitted that these cuts will be tough, but he thinks they're necessary for the company's future. The job cuts are expected to affect around 17,000 workers. Just a few days before this announcement, Boeing stopped talks with striking machinists. The company said the union's demands were too high. Former US Labor Secretary Robert Reich pointed out that Boeing spent $68 billion on dividends and stock buybacks over the past decade and gave its last two CEOs huge retirement packages. He thinks Boeing's greed is the real problem. Jon Holden, the president of the machinists' union, said that Boeing's management keeps avoiding negotiations and using old tactics. He thinks Ortberg has a chance to do things differently and end the strike. Holden believes that the union members will decide if any deal is accepted. They want a fair solution that meets their needs.

Actions