Business
Boeing To Lay Off Roughly 10% Of Its Workforce
Boeing’s CEO informed employees late Friday that the business planned to eliminate 10% of its total workforce “over the coming months.”
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” said Kelly Ortberg, who took over as CEO of the ailing aircraft manufacturer two months ago and has spent half of his time dealing with a strike by 33,000 hourly workers.
The revelation is only the latest blow to the beleaguered planemaker, which has suffered losses of more than $33 billion over the last five years, as well as a number of serious, often fatal, safety violations and greater scrutiny from regulators and law enforcement.
Boeing To Lay Off Roughly 10% Of Its Workforce
“Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term,” Ortberg wrote in a Friday message to employees regarding “positioning for the future.”
Ortberg’s notification did not specify how many jobs would be slashed, despite the fact that Boeing had 171,000 employees globally at the start of the year, 147,000 of whom were in the United States.
Years of challenges and losses.
Boeing has faced significant challenges for more than five years, beginning with two tragic crashes of its best-selling airliner, the 737 Max, in 2018 and 2019, which resulted in the jet’s global suspension for 20 months. It also incurred enormous losses in 2020, when the epidemic almost halted air traffic and drove airlines to reduce their purchases of new planes.
One of its more recent concerns was a door plug on an Alaska Airlines 737 Max that blew off minutes into a January 5 flight, leaving a gaping hole in the plane’s side.
While the plane landed safely with no significant injuries to passengers or crew, it spurred a new round of federal inquiries into the safety and quality of Boeing aircraft. The National Transportation Safety Board’s preliminary findings revealed that the plane left a Boeing facility two months earlier without the four bolts required to secure the door plug.
Boeing’s space and defense businesses are also losing money. The Starliner spacecraft’s first crewed trip left the two astronauts it carried trapped on the International Space Station for months, rather than the planned short visit.
Ortberg stated on Friday that the corporation should prioritize focusing resources over distributing them over multiple initiatives, which can lead to underperformance or underinvestment.
Boeing has already declared that it will implement rolling unpaid furloughs for a substantial number of its nonunion employees in order to save money during the International Association of Machinists (IAM) strike. The furloughs required the impacted employees to take one week off every four. Friday marked the conclusion of the fourth week of the strike.
The layoff decision means that the next furlough cycle will not occur, Ortberg wrote on Friday. Employees will be told about the future of their respective portions of the organization beginning next week.
“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them,” he texted. “However, the state of our business and our future recovery require tough actions.”
Losses increase during the strike.
Boeing’s debt has skyrocketed during the last five years, and the main credit rating agencies say it is in danger of being downgraded to junk bond status for the first time in its history.
Standard & Poor’s reported last week that the strike, which has halted the majority of the company’s commercial plane manufacturing, is costing them approximately $1 billion per month. Boeing makes the majority of its money when it sells a jet and delivers it.
Despite the poor financial situation, Boeing had offered IAM members a 25% raise during the four-year term of the proposed contract. However, rank-and-file union members nearly unanimously rejected the offer and opted to go on strike beginning September 13.
Boeing then increased their offer to increase salaries by 30%, but the union leadership said it was still insufficient. The union claims that the corporation can afford its salary demands despite its losses, pointing out that wages for its members account for only a small portion of an airplane’s total costs. It blames the company’s years-long losses on poor management.
Federally mediated talks between the two groups ended earlier this week. Boeing claimed late Thursday that it filed a complaint with the National Labor Relations Board ahead of the layoff announcement, alleging that the union is not bargaining in good faith, which the union refuted after the job cutbacks were disclosed.
Boeing To Lay Off Roughly 10% Of Its Workforce
“Bargaining is hard work, and Boeing keeps walking away from the table,” said Jon Holden, IAM president of District 751, which includes the majority of the strikers. “Their complaints about our plans demonstrate their desperation and serve as proof to our members that we are working for them. Our people will become more rebellious and unified as they witness Boeing repeatedly walk away and quit.”
However, wages are not the only concern. Union members are still upset that Boeing forced them to give up their traditional pension plans ten years ago when the firm was doing well financially.
The rank-and-file union members at the time narrowly agreed to the loss of pensions because Boeing threatened to relocate workers from unionized operations in Washington state to other ones it might establish abroad. Boeing canceled the threat in exchange for the loss of the pension schemes.
Boeing is unlikely to go out of business, despite its numerous issues. Airbus is the company’s only competitor in the full-size passenger plane market. However, Airbus does not have enough capacity to handle Boeing’s orders. This is due to the fact that both Boeing and Airbus have long-term order books for their aircraft. If airlines cancel their orders with Boeing, they will have to wait five years for a comparable Airbus jet.
Among the programs being eliminated is the 767 jet, which is now solely constructed as a freighter. Boeing will terminate that plane after the current orders are completed and delivered to clients in 2027. That plane was manufactured by some of the union members who are currently on strike.
The union published a statement stating the announcement regarding the 767’s discontinuation “is very troubling, particularly given the current state of negotiations.” It stated that any decision about the 767 years in the future would have nothing to do with the current strike.
“Boeing is trying to bargain in the press. “It will not work and is detrimental to the bargaining process,” Holden stated. “They are seeking to deal directly with the membership, sowing seeds of mistrust and division within our union. They seek to create a schism inside our union. There is no prospect of that happening. We are stronger than ever and united at every picket line.”
Ortberg also announced that Boeing’s newest widebody passenger airliner, the 777X, will be delayed even longer. The corporation had previously reported that it had been forced to cease test flights due to technical issues. “We have notified customers that we now expect first delivery in 2026,” he stated in an email.
SOURCE | AP
Business
Subsidies for Electric Vehicles Cut as Consumer Interest Fades
Pressure is building on Canada’s electric vehicle manufacturers, and several are rethinking their stance on E.V.s in favor of plug-in hybrids. Automobile manufacturers are now bracing themselves for an even more challenging era in the Canadian market for electric vehicles (E.V.s).
President Kristian Aquilina of General Motors Canada claims that support and expectations are misaligned because the Canadian government is reducing subsidies for electric vehicles while trying to phase out gas-powered cars.
Manufacturers find pushing for an all-electric future in Canada increasingly difficult due to fewer consumer financial incentives and increasingly strict sales targets.
With subsidies totaling up to C$12,000 (about $8,500), Canadian consumers may save a tonne of money on electric automobiles. The federal government offers a rebate of up to $5,000 Canadian, and the provinces of Quebec and British Columbia provide further incentives of up to $7,000 and $4,000, respectively.
Ontario, which eliminated rebates in 2018, had the lowest market share for electric vehicles compared to Quebec and British Columbia, two regions that offered bigger incentives and thereby drove E.V. adoption in Canada.
Although this backing is dwindling, the province of Quebec has now declared that all subsidies will end in 2027. In June, the British Columbia government restricted incentives to a smaller subset of E.V. purchasers for “available funding” and higher-than-expected E.V. sales growth.
These reductions indicate a larger pattern: provincial governments reevaluate the sustainability of taxpayer-financed incentives for E.V.s as budget deficits widen.
With lofty goals to cut pollution from gas-powered cars and increase sales of electric vehicles, the Canadian government has reduced subsidies for these vehicles. Electric or plug-in hybrid vehicles will be mandatory for all new light-duty vehicle sales in Canada by 2035.
To meet our intermediate goals, 20% of new sales must be electric vehicles (E.V.s) by 2026 and 60% by 2030. Car companies are already under a lot of pressure due to dwindling incentives and increasing demands, and the clock is ticking faster by the second.
In addition, these rules impose new forms of responsibility. Automakers that do not reach their provincial sales targets may be subject to financial fines imposed by provinces such as British Columbia.
Canadian manufacturers are already under financial pressure from federal compliance credit system standards, which they must meet or face deficits. This system gives them credit for electric vehicle sales and infrastructure improvements, but it’s not without its challenges.
“The timing is not necessarily lining up very well, in that the purchase incentive support comes off just as mandates and regulations start to bite,” GMC Canada President Kristian Aquilina told Bloomberg. “It must make a difference.
Therefore, we must consider that. Despite the cutbacks, Aquilina argued that the government’s investment in enhancing the charging infrastructure could benefit E.V. sales.
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Business
Chewy Slides After Filing Shows 3rd-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake
Washington — Chewy shares fell about 2% overnight Wednesday after a regulatory filing showed that Roaring Kitty, a meme stock trader, sold his interest in the online pet retailer.
According to a beneficial ownership document filed with the Securities and Exchange Commission on Tuesday, Roaring Kitty, whose legal name is Keith Gill, sold all his Chewy shares, totaling 6.6% of the company.
Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake
Plantation, Florida-based Chewy dropped 1.9% after hours to $26.19 per share.
Gill, an investor at the core of the meme stock craze, bought more than 9 million shares of Chewy in July, making him the company’s third-largest stakeholder.
Gill built a name for himself in 2021 by rallying ordinary investors around GameStop. At the time, the video game shop was fighting to stay in business, and major Wall Street hedge funds and investors were betting against it or shorting the stock. But Gill and those who agreed with him altered GameStop’s direction by purchasing thousands of shares despite practically all acknowledged criteria indicating that the firm was in deep peril.
Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake
That triggered what is known as a “short squeeze,” in which large investors who had bet on GameStop were obliged to buy its swiftly increasing stock to offset significant losses.
Gill has expressed confidence in GameStop Chairman and CEO Ryan Cohen’s ability to revamp the company following his success at Chewy. Cohen cofounded Chewy in 2011 and stepped down as CEO in 2018.
SOURCE | AP
Business
Canada CBC News CEO Catherine Tait Recalled to Parliamentary Committee
Canada CBC News reports that MPs have voted to recall CBC CEO Catherine Tait to a Commons committee for questioning, only a week after her last appearance, over the awarding of $18 million in bonuses to Canada CBC news executives.
The Conservatives, the Bloc Québécois, and the NDP joined forces to re-invite Ms. Tait, her successor Marie-Philippe Bouchard, and Heritage Minister Pascale St-Onge to appear before the Commons Heritage Committee.
Ms. Tait, who will relinquish her position as CEO and president of CBC/Radio Canada in January, addressed the committee last week. The House of Commons has passed a motion recalling her before the conclusion of her term, and she is now subject to an additional two hours of interrogation, which includes inquiries regarding bonuses.
MPs also resolved to summon Quebec broadcasting executive Marie-Philippe Bouchard, appointed as the new chief of CBC/Radio-Canada last week, to appear before she begins her new job following a House of Commons chamber debate.
Catherine Tait Exit Package
Catherine Tait rejected the Conservatives’ requests to deny an exit package, including bonuses, when she departed the position in January during last week’s committee hearing.
She also defended the award of $18.4 million in incentives to 1,194 staff members for the 2023-2024 fiscal year, which concluded in March, following the broadcaster’s achievement of performance indicators.
Kevin Waugh, a Conservative committee member who introduced the motion, stated that his party aimed to ensure Ms. Tait was “accountable to taxpayers” before her departure in January.
He informed The Globe and Mail that “Canadians are dissatisfied with the bonuses” and that Catherine Tait‘s exit package, which will not be disclosed, is a cause for concern.
“I am apprehensive that she has not received her bonuses in over two years, and that the Minister of Heritage or Privy Council will lavish her with bonuses when she departs in January,” he stated.
The Liberals opposed a portion of the motion that claimed that “the Liberal threat to cut funding” had resulted in the elimination of hundreds of jobs at CBC/Radio-Canada.
Defunding CBC News Canada
The Heritage Minister informed The Globe that the claim was “hypocritical,” as the Conservatives intended to completely defund CBC.
“The Conservatives’ actions today are a clear example of hypocrisy.” Ms. St-Onge stated that performance bonuses increased by 65% during the Harper Conservatives’ tenure, while CBC News Atlantic Canada experienced substantial budget cutbacks.
“As a government, we do not require any lessons from a party that has pledged to reduce the funding of CBC/Radio-Canada and the 8,000 jobs associated with it during its campaign.”
During the Tuesday debate, NDP MP Niki Ashton stated that her party endorses the “banning of executive bonuses” at CBC News Atlantic Canada but is opposed to “the Conservatives’ full frontal attack” on the broadcaster.
She stated, “We require a robust public broadcaster, but not one that distributes executive bonuses and eliminates positions.”
If the Conservatives establish the next government, they intend to deprive the CBC of public funding while maintaining French services.
Catherine Tait defended CBC and rebuffed MPs’ assaults during last week’s committee hearing. “It is evident that the members of this committee are making a concerted effort to discredit the organization and vilify me,” she stated.
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