Boeing suspends Washington production, GE Aviation lays off thousands

Boeing suspends Washington production, GE Aviation lays off thousands
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Two major U.S. aviation companies on Monday announced drastic measures as the coronavirus pandemic continues to sweep the globe and hammer economic markets.

Boeing said it was suspending airplane production in the Seattle area for 14 days beginning on March 25.

The shutdown will take place at “sites across the Puget Sound area,” where roughly 70,000 employees work to build such aircraft as the Air Force’s KC-46 aerial refueling tanker and Navy’s P-8 Poseidon submarine hunters, according to a company statement.

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The closures will include “additional deep cleaning activities at impacted sites,” as more than a dozen employees had confirmed coronavirus cases, Reuters reported Monday.

General Electric, meanwhile, will lay off about 2,600 employees -- or about 10 percent of the workforce -- from its aviation arm, which makes engines for military aircraft.

In addition, about half of its U.S. maintenance, repair and overhaul employees will be furloughed for three months, GE Chairman and CEO Larry Culp said in a statement Monday.

“The rapid contraction of air travel has resulted in a significant reduction in demand as commercial airlines suspend routes and ground large percentages of their fleets,” Culp said. “As a result, GE Aviation is announcing several steps that, while painful, preserve our ability to adapt as the environment continues to evolve.”

The moves come amid a massive slowdown in commercial air travel caused by COVID-19, with numerous companies forced to furlough workers and shut down lines to weather the downturn.

Textron Aviation last week announced that it will stagger a four-week furlough of about 7,000 employees – most U.S.-based – beginning on March 23 and lasting until May 29.

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The defense contractor makes the Beechcraft T-6 trainer used for Air Force pilot training, among other aircraft.

And Boeing, which was already in a fragile state after the grounding of its 737 Max jets and setbacks to fixing and delivering KC-46s - last week asked for at least $60 billion in federal loan guarantees for itself and U.S. aerospace firms.

“The aviation industry is feeling the impact of this global pandemic most acutely,” Culp said. 

Boeing President and CEO Dave Calhoun said in the company’s statement that the firm is working with public health officials, customers, suppliers and other stakeholders who are affected by the temporary suspension.

“We regret the difficulty this will cause them, as well as our employees, but it's vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19,” Calhoun said.

The statement added that Boeing is “working to minimize this suspension's impact on the company's ability to deliver and support its defense and space programs,” and that distribution operations in support of airline, government, and maintenance, repair and overhaul customers will continue.

GE Aviation, meanwhile, said it had already started a hiring freeze and canceled salary increases, and that company CEO and Vice Chairman David JoyceDavid Patrick JoyceBoeing suspends Washington production, GE Aviation lays off thousands Mnuchin details IRS challenges with cash-only marijuana businesses Democrat: Lawmakers need to approach opioid crisis as 'a chronic situation' MORE will forgo half of his salary.

Culp will also forgo the remainder of his salary for 2020 beginning on April 1, he said.