Boeing plans 2,000 job cuts in defense work
By DOMINIC GATES | The Seattle Times | Published: September 30, 2014
In the latest drain of high-paying Boeing jobs out of Washington state, the jet maker’s defense division said Monday it will shift about 2,000 jobs, mostly in engineering, out of the region by 2017.
Some workers with critical skills will be offered relocation to Oklahoma City, Okla., and St. Louis, Mo. Others may find jobs at Boeing’s commercial jet unit, based in Washington. The number of layoffs won’t be known until Boeing finds out how many people relocate, transfer or choose to leave.
The jet maker currently employs a total of about 5,200 people in defense work in the region, so the moves will cut deeply into that total.
Employees in Kent and Seattle will be most affected and will get details at an all-hands meeting scheduled for Tuesday.
Chris Chadwick, chief executive officer of Boeing’s defense unit, said in a statement that the decision “was difficult because it affects our employees, their families and their communities.”
But he added, “This is necessary if we are going to … stay ahead of a rapidly changing global defense environment.”
Jim O’Neill, president of the Global Services and Support unit in the defense division, in an accompanying statement said moving the work “will allow the business to more efficiently use the resources and capabilities across the company.”
Ray Goforth, executive director of Boeing’s white-collar union, the Society of Professional Engineering Employees in Aerospace, said the union warned state legislators last year to include job protections with the $8.7 billion of tax breaks passed to secure the building of the 777X in Washington.
He said that without any such protections, the company has been shifting thousands of engineering jobs out of state since the legislation was passed.
Internally, management planning the defense-job transfers out of Washington had assigned the project a code name: Neptune. Neither state nor union officials were informed of the plan before it became public Monday.
The work set to move out of state is done mostly by engineers who support military airplanes in service. They oversee maintenance, modifications and upgrades to the avionics, weapons and sensor systems.
Engineering support for both the older 707-based Airborne Warning and Control System jets and the updated 737-based Airborne Early Warning and Control jets will begin shifting to Oklahoma City later this year, continuing through mid-2016.
Engineering support for the B-2 Stealth Bomber and the Air Launched Cruise Missile will transition to Oklahoma City in 2015.
Support work for the F-22 Raptor jet fighter will move to St. Louis beginning in 2015 and continuing through early 2017.
In addition, a small number of jobs supporting the U.S. Navy deployment of the P-8 will be shifted in 2015 to Navy facilities in Jacksonville, Fla., and Patuxent River, Md.
Boeing’s Oklahoma City operation has expanded to about 1,800 employees. That site focuses on engineering support for larger military airplanes, work that has migrated there since 2012 from Wichita, Kan., and from Southern California.
St. Louis, the headquarters of Boeing’s defense unit, employs about 14,500 people but faces severe contraction as the aging F-15 and F/A-18 jet-fighter programs approach their end, expected within a few years.
But even after the assembly lines there close, St. Louis will retain a core of engineers to support those jet fighters with maintenance, modifications and upgrades. Consolidating support there for the F-22 — which is no longer produced — is therefore “appropriate,” said Peri Widener, Boeing vice president for integrated logistics.
The decision to move the AEW&C work is surprising because new orders are expected for those jets, which are used for airborne surveillance, communications and battle management.
AEW&C jets have been sold to Australia, South Korea and Turkey. Earlier this year, Qatar announced another international order, not yet finalized, for three more aircraft.
These jets start out as 737s, assembled in Renton, and then have large, military radar antennae added on top of the fuselage. Originally, these odd-looking radar systems were fitted in Seattle and were a common sight at Boeing Field.
However, as part of work offsets to win contracts from foreign governments, Boeing has gradually been transferring the job of installing the military radars to the countries buying the jets.
“Where that end modification is done depends on customer expectations,” said Scott Strode, vice president of maintenance, modification and upgrades.
Strode said moving the engineering support to Oklahoma City makes sense because some AWACS work is done there today.
Still, he acknowledged that “the skills and abilities of our workforce here (in Washington) are tremendous” and conceded there’s a risk of losing valuable talent.
SPEEA spokesman Bill Dugovich said Boeing told the union that last year when it announced the move of 1,000 commercial jet support jobs to Southern California, the company offered relocation to just 15 percent of the affected employees. Only 5 percent accepted relocation.
“There will be critical skills we’ll look at relocating,” Strode said. There also will be opportunities for displaced employees to transfer locally, either to commercial jet work or to the Air Force tanker program.
“There may be some layoffs,” he said. “We don’t know what kind of a number that will be.”
Boeing will offer job-search resources, retirement seminars and career-counseling services, the company said.
The average salary for the affected Boeing engineers and technical staff is $93,000, with senior engineers earning much more, according to SPEEA data.
Boeing’s Chadwick, in his statement outlining the jobs exodus, said that “even with the announced moves, Boeing … continues a robust presence in the Puget Sound region.”
“We are committed to the long-term success of Boeing in Puget Sound,” he said.
Engineering and assembly of the Air Force refueling tanker will stay at the widebody-jet plant in Everett.
The Navy’s anti-submarine plane, the P-8, will continue to be assembled in Renton and have its military systems installed at a facility beside Boeing Field in Seattle.
Coincidentally, last week Washington state announced a $4.3 million Department of Defense grant to prepare for the impacts of expected military spending cuts in the state.
Alex Pietsch, director of Gov. Jay Inslee’s aerospace office, said state officials are “focused on this transition in the U.S. military and working our hardest to mitigate it.”
He said he’s disappointed at the Boeing news but optimistic about continuing expected growth in the commercial jet side of Boeing’s business.
These new defense-side cuts come on top of a series of engineering-work transfers out of Washington state that Boeing announced over the past 18 months within its Commercial Airplanes and corporate-research divisions.
Those previous announcements involved shifting more than 4,300 engineering jobs out of the region.
Boeing employs nearly 82,000 people in Washington state. That workforce is 4,600 jobs or nearly 6 percent less than it was at the beginning of 2013 and some of the previously announced cuts still working through the system.
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