Boeing Co (NYSE:BA) is looking forward to trim several hundred employees in its satellite segment through the end of this year amid a decline in the U.S. military spending and interruptions in commercial satellite orders.
Several commercial orders were being postponed due to latest failures of launch vehicles and doubts regarding the availability of financing in the future from the U.S. Export-Import Bank, the company told managers during an internal discussion.
A spokesman at Boeing, Tim Neale confirmed the jobs cut and stated the overall number of workers affected would be confirmed in the upcoming months. Neale added that few of them could find a place in other divisions of the company. He also said that the reductions were essential to stay competitive for current and future business.
The latest announcement shows the recent outcome from the ongoing discussion regarding the future of EXIM, the export credit agency of the U.S. government that can no longer offer trade guarantees, and write new loans.
Officials at the U.S. government said they are increasingly worried about the effects of forced closure of the bank on a broad range of U.S-based companies, including several small enterprises.
Those who back EXIM said that the bank produces revenue for the government, and assists in leveling the playing ground for the U.S. firms whose competitors in other countries get similar trade credits.
Workforce numbers for different business segments were not break down by the company, though Boeing has roughly 16,800 employees in California, where it makes satellites and works on commercial airplanes.
The latest announcement came about one month after ABS, a commercial satellite provider, abandoned a big satellite agreement with Boeing over uncertainty regarding the future of EXIM bank.
Official at Boeing were still negotiating with ABS to look for an alternative financing option, though ABS was actively engaged in talks with other satellite manufacturers, which had access to trade credits.
