Boeing says it fired 65 employees for racist, discriminatory conduct

(Reuters) – Boeing Co said on Friday it fired 65 employees over the last year for engaging in or being part of racist, discriminatory or hateful conduct.

In a company-wide report that reveals the first demographic breakdown of its workforce, the plane maker said the employees were terminated between June 2020 and April 21, 2021.

American companies have come under pressure from investors to publicly disclose information about diversity among employees in the wake of racial justice and movements such as Black Lives Matter.

Boeing said about 69% of its U.S. workforce was made of white employees and 31% from other races, including about 6.4% Black employees. Boeing has previously said it aims to take the number of Black employees up by 20%.

Boeing, which has seen the ranks of its senior female executives shrink in recent years, also said data showed women made up 13.6% of its executive council, a drop from about 30% over the past year.

Part of the reason for the gender gap in the council is its expansion to 22 members, with just three female executives, from 13 members, with four female executives, as of March 1, 2020.

Overall, women represented between 23% and 25% of Boeing U.S. and non-U.S. workforce, the company said.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)

Boeing delivers 29 aircraft in March; orders positive for second straight month

By Ankit Ajmera

(Reuters) – Boeing Co said on Tuesday it delivered 29 aircraft in March, up from 20 a year earlier, with the U.S. plane maker’s net orders staying positive for the second straight month as airlines get ready for a recovery from the COVID-19 pandemic.

The company’s orders appear to be turning a corner after the coronavirus crisis caused airline customers to cancel hundreds of jets on orders last year, resulting in one of the worst performances for Boeing ever.

Boeing’s net orders turned positive for the first time in 14 months in February as COVID-19 vaccine rollouts boosted the confidence of its customers.

The plane manufacturer said it booked March gross orders of 196 aircraft, all of them for its 737 family of jets. Net of cancellations and conversions, Boeing had 40 jet orders for its 737 planes last month.

Boeing said its March gross orders include previously announced 100 737 MAX orders for Southwest and 24 737 MAX orders for private investment firm 777 Partners and 11 orders for P8 military aircraft.

Turkish Airlines canceled 10 737 MAX airplane orders in March and converted 40 737 MAX jet orders to options.

China’s CDB Financial scrapped 16 737 MAX orders last month and China Aircraft Leasing canceled 26 737 MAX orders.

Alaska Air and United Airlines respectively re-contracted nine and 25 737 MAX orders last month for earlier delivery positions.

Nineteen 737 MAX orders were canceled by unidentified customers in March.

Boeing’s gross orders for the first quarter were 282 airplanes. Net of cancellations and conversions, orders stood at 69 aircraft in the quarter. Adjusted for stricter accounting standards, Boeing’s net orders were 76 airplanes in the first quarter ended March.

Boeing’s official backlog rose to 4054 aircraft orders in March from 4041 orders in February.

The company delivered a total of 77 airplanes in the first quarter, up from 50 aircraft a year earlier. Boeing resumed 787 jet deliveries in late March after halting them for four months due to production defects.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel)

EU set to impose tariffs on $4 billion U.S. goods next week

By Philip Blenkinsop

BRUSSELS (Reuters) – The European Union is likely to impose tariffs on $4 billion of U.S. imports including planes and plane parts next week in retaliation over U.S. subsidies for aircraft maker Boeing, EU diplomats said on Friday.

A majority of EU governments have already backed the tariffs, which are expected to be put in place after a meeting of EU trade ministers on Monday.

“I would expect the tariffs to be imposed next Tuesday or Wednesday,” an EU diplomat said.

The move will echo U.S. tariffs on European goods over subsidies for Boeing’s rival Airbus. Combined, the two cases represent the world’s largest ever corporate trade dispute.

The World Trade Organization gave the European Union the right to impose counter-measures, but the United States said that there was no legal basis this and that, if the bloc chose to impose measures, it “will force a U.S. response”.

The move puts the long-running transatlantic trade dispute on the radar of the next U.S. administration, whoever wins the closely fought election.

The European Union could have acted at the end of October, just days before the U.S. election, but chose to delay in order to avoid potentially impacting the outcome. EU governments formally cleared the move on Tuesday, election day.

Tariffs are due to be placed on U.S. planes and parts, fruits, nuts and other farm produce, processed products such as orange juice, certain spirits and a range of other goods, from construction equipment to casino tables, diplomats said.

The European Commission said it was finalizing the process to exercise its retaliation rights in case no agreed solution could be found with Washington, including the immediate suspension of U.S. measures.

The United States Trade Representative had no immediate comment.

The United States already has tariffs on $7.5 billion of EU and British goods in relation to a parallel case over subsidies for European plane maker Airbus.

Chris Swonger, president and CEO of the Distilled Spirits Council of the U.S., said any tariffs on spirits would further devastate an industry that has already seen a 41% drop in U.S. whisky exports to Europe due to previous EU tariffs.

The tariffs also hand Britain, which left the EU this year, a delicate decision about whether to join its neighbors in imposing tariffs at a time when it is in the midst of trade negotiations with both the United States and European Union.

Britain’s trade minister said last week it would “keep all options open” to ensure it can respond to U.S. tariffs on Scotch whisky and other industries. Britain is one of four Airbus partner nations alongside France, Germany and Spain.

(Reporting by Philip Blenkinsop, additional reporting by Andrea Shalal in Washington, Editing by Tim Hepher)

Boeing cuts jet demand forecast on pandemic crisis

By Eric M. Johnson and Tim Hepher

SEATTLE/PARIS (Reuters) – Boeing cut its rolling 20-year forecast for airplane demand on Tuesday, sending its shares lower as the COVID-19 pandemic lays waste to deliveries over the next few years.

The U.S. plane maker, which dominates jet sales together with Europe’s Airbus, forecast 43,110 commercial aircraft deliveries over the next 20 years, down 2% from 44,040 projected a year ago and worth an unchanged $6.8 trillion at list prices.

While fleets are still expected to almost double, it is the first time since the 2009 financial crisis that Boeing has cut the 20-year demand forecast in terms of the number of deliveries.

Boeing, also for the first time, lifted the lid on the first half of the 20-year period, showing steep declines for the coming decade on the heels of the COVID-19 crisis. It predicted 18,350 deliveries for 2020-2029, down 10.7% from an unpublished forecast of 20,550 embedded in the last report.

“The industry clearly has been dramatically impacted … by the pandemic,” Commercial Marketing Vice-President Darren Hulst said.

Boeing shares fell as much as 3.3% after the report.

A key forecast for passenger traffic growth – once a reliable 5% a year – has been edging lower since 2015 as a record aviation boom peaked. But it took a sharp knock lower in the latest report, falling to 4% from 4.6% a year ago.

Boeing, America’s largest exporter, lowered its assumption for average global economic growth over 20 years to 2.5% from 2.7% after the pandemic plunged key markets into recession.

Even so, Boeing expressed confidence that demand would return towards previous trends in the 2030’s, just as it did after earlier economic shocks. Environmentalist critics say the crisis is an opportunity for the industry to get smaller.

WEAK DEMAND FOR BIG JETS

“It will take longer from this crisis but … the industry will prove resilient again; the fundamentals aren’t changing,” Hulst said.

Demand will be buoyed in part by a rise in the number of replacements as airlines accelerate the retirement of older jets to save running costs and meet environmental goals.

Thousands of jets have been parked during the crisis, especially long-haul twin-aisle models, owing to the widespread border restrictions choking international air travel.

Boeing cut its 20-year forecast for twin-aisle models such as its 787 Dreamliner and the Airbus A350 by more than 10%. At 7,480 jets, down from 8,340 a year ago, that part of the 20-year forecast is now lower than 8,000 for the first time since 2010.

Twin-aisle demand will be especially slow in the next 10 years with deliveries of only 3,060 aircraft, Boeing said.

The 20-year forecast for smaller single-aisle jets, such as the grounded 737 MAX, dipped 0.5% from the last survey. Previously Boeing had been revising it up by about 3.5-4% year in, year out.

Boeing now sees 32,270 deliveries in the medium-haul single-aisle category, traditionally the cash cow of large plane makers. That includes 13,570 deliveries between now and 2029.

Although medium-haul travel is showing signs of revival, particularly in the booming China market, airlines there continue to sit on the sidelines amid U.S. trade tensions.

While global passenger demand has been mauled by COVID-19, demand for freighters has gone up as shippers seek alternatives to the cargo space being left empty in unused passenger jets.

Despite that near-term bump, Boeing cut its 20-year forecast for freighters by 10.6% to 930 jets on weaker trade and a move by carriers to group shipments into bigger jets to reduce costs.

(Reporting by Eric M. Johnson in Seattle; Editing by Mark Potter and David Goodman)

Boeing’s first Starliner crewed mission tentatively slated for 2021

By Eric M. Johnson

SEATTLE (Reuters) – Boeing Co said on Tuesday it aims to redo its unmanned Starliner crew capsule flight test to the International Space Station (ISS) in December or January, depending on when it completes software and test hardware production development.

If the test mission is successful, Boeing and NASA will fly Starliner’s first crewed mission in summer 2021, with a post-certification mission roughly scheduled for the following winter, the company added.

Boeing is eager for another shot at proving its crew capsule after technical failures put the aerospace juggernaut behind Elon Musk’s rocket company SpaceX, which successfully returned its rival crew capsule from the ISS earlier this month.

During Boeing’s first uncrewed test, in December 2019, a series of software glitches and an issue with the spacecraft’s automated timer resulted in Starliner failing to dock at the space station and returning to Earth a week early.

In February, a NASA safety review panel found Boeing had narrowly missed a “catastrophic failure” in the botched test, and recommended examining the company’s software verification process before letting it fly humans to space.

Earlier this month, Boeing watched from the sidelines as SpaceX’s Crew Dragon capsule splashed down in the Gulf of Mexico after a two-month voyage to the International Space Station – NASA’s first crewed mission from home soil in nine years.

(Reporting by Eric M. Johnson in Seattle; Editing by Chizu Nomiyama and Richard Chang)

Boeing to offer second layoff plan, CEO Calhoun sees smaller market ahead

By Bhargav Acharya

(Reuters) – Boeing Co. said on Monday it would offer employees a voluntary layoff package with pay and benefits for the second time this year, as the plane maker battles a coronavirus-induced slowdown in global air travel.

It will be offered to employees in the commercial airplanes and services businesses as well as corporate functions, Chief Executive Officer Dave Calhoun wrote in a note to employees, a copy of which was seen by Reuters.

“Unfortunately, layoffs are a hard but necessary step to align to our new reality, preserve liquidity and position ourselves for the eventual return to growth,” Calhoun said in the note.

“We anticipate seeing a significantly smaller marketplace over the next three years.”

The health crisis, which has hammered plane makers, airlines and suppliers, has added to the woes of Boeing that has been grappling with a production freeze and year-long grounding of the 737 MAX following two fatal crashes.

The company doesn’t have a set target at this time and was encouraging all eligible employees interested in the voluntary layoff package to apply, Boeing said in a statement.

The move to extend the overall workforce reductions beyond the initial 10% target is in response to employee feedback, Calhoun said.

The plane maker had said in April it would cut its 160,000-person workforce by about 10%, many of which was to be completed by the end of this year at its commercial aircraft division.

More details will be made available to the employees beginning Aug. 24, according to the CEO’s note.

(Reporting by Bhargav Acharya in Bengaluru; Editing by Arun Koyyur)

Boeing cuts output of big jets as pandemic hammers sales

By Ankit Ajmera and Eric M. Johnson

(Reuters) – Boeing Co <BA.N> slashed production on its widebody programs, delayed the arrival of its newest jet, and confirmed the demise of its iconic 747, as it reported a bigger-than-expected quarterly loss on Wednesday amid fallout from the COVID-19 pandemic.

The U.S. planemaker, which is also grappling with the 16-month-old ban on its 737 MAX after fatal crashes, delayed its timeline to hit build rates of 31 narrowbodies monthly to early 2022 from 2021, as the pandemic decimates new jet demand.

The production cuts reflect concern among aviation companies across the board about the pace of the coronavirus recovery. Global airlines warned on Tuesday it would take a year longer than expected for air traffic to return to normal levels, with long-range travel hit harder than short hops.

The outbreak has crippled passenger travel and pushed major airlines to the brink of bankruptcy, resulting in many carriers deferring aircraft deliveries.

Boeing also confirmed the last 747, the iconic hump-topped jumbo jet that democratized global air travel in the 1970s but fell behind modern twin-engine aircraft, would roll out of its Seattle-area factory in around two years.

Boeing Chief Executive Dave Calhoun said the Chicago-based company was working closely with airlines and suppliers to manage a COVID-19 recovery process that could take three years.

“Air travel has always proven to be resilient – and so has Boeing,” Calhoun added.

The 737 MAX grounding has cost Boeing some $20 billion, ousted executives, halted production and hobbled its supply chain, with criminal and congressional investigations and lawsuits still ongoing.

The coronavirus pandemic has exacerbated this crisis.

Boeing will now reduce 787 production to six jets a month in 2021 – a third rate drop from a year ago, when it was producing the Dreamliners at a record monthly rate of 14 planes.

Boeing also said it would again reduce the combined production rate of the 777 and 777X jets to two planes per month in 2021, while delaying the 777X’s entry into service by up to a year, as Reuters previously reported.

Boeing’s commercial airplanes operating profit was hit by $845 million in abnormal production costs on 737 and factory closures related to COVID-19 fears. Boeing also logged $468 million in severance expenses related to reducing its roughly 160,000 workforce by 10%, saying on Wednesday deeper cuts were possible.

“We’ll have to further assess the size of our workforce,” Calhoun told employees in a memo on Wednesday.

While Calhoun said the 737 MAX certification process was proceeding well, investors on an analyst call will be waiting for any signal that Boeing would push back the already delayed timeline for resuming MAX deliveries beyond end-September. That means the jet’s U.S. return to service could slip to 2021.

“The plethora of downside risks are not fully reflected in Boeing’s current share price,” Vertical Research Partners analyst Rob Stallard said, noting that clearing an inventory of some 400 built MAX aircraft could take longer than expected.

Shares were down 1.1%.

On an adjusted basis, Boeing lost $4.79 per share, bigger than analysts’ average estimate of a loss of $2.54, according to IBES data from Refinitiv.

The company’s sales tumbled 25% to $11.81 billion in the quarter, missing estimates of $13.16 billion.

(Reporting by Eric M. Johnson in Seattle and Ankit Ajmera in Bengaluru; Additional reporting by David Shepardson in Washington and Tracy Rucinski in Chicago; Editing by Sriraj Kalluvila and Nick Zieminski)

Ukrainian FM says Iranians to discuss crash compensation in Ukraine

WARSAW (Reuters) – An Iranian delegation will visit Ukraine on Wednesday and Thursday to discuss compensation for a Ukrainian jet shot down by Iran on Jan. 8, the Ukrainian foreign minister said on Monday.

Iranian forces say they downed the Ukraine International Airlines Boeing 737 jet on Jan. 8 after mistaking it for a missile amid heightened tensions with the United States. All 176 people on board – including 57 Canadians – were killed.

“Given the circumstance of what happened, there are all reasons to ask from Iran to pay the highest price for what it did,” Dmytro Kuleba, speaking in English, told a news conference during a visit to the Polish capital Warsaw.

Kuleba said Ukraine would represent all countries and groups affected during the talks.

“I cannot disclose final numbers of the compensation … numbers will be the result of the consultations,” he said.

The aircraft was shot down hours after Iran fired missiles at Iraqi air bases housing U.S. forces in retaliation for the U.S. drone killing of a senior Iranian commander.

The data extraction from the recovered black boxes is being carried out with an Iranian investigator and observed by Canadian, U.S., Swedish and British experts and representatives from UIA, Boeing and engine maker Safran.

(Reporting by Joanna Plucinska; Writing by Alan Charlish; Editing by Alison Williams and Philippa Fletcher)

FAA issues emergency directive on 2,000 Boeing 737 NG, Classic planes

By David Shepardson

WASHINGTON (Reuters) – The Federal Aviation Administration (FAA) on Friday issued an emergency airworthiness directive for 2,000 U.S.-registered Boeing 737 NG and Classic aircraft that have been in storage, warning they could have corrosion that could lead to a dual-engine failure.

The directive covers planes not operated for seven or more consecutive days. The FAA issued the directive after inspectors found compromised air check valves when bringing aircraft out of storage.

If corrosion is found, the valve must be replaced prior to the aircraft’s return to service, the FAA said.

Boeing Co. said on Friday it had advised operators to inspect the planes and added “with airplanes being stored or used infrequently due to lower demand during the COVID-19 pandemic, the valve can be more susceptible to corrosion.”

U.S. airlines stored thousands of airplanes after the coronavirus pandemic sharply reduced travel demand and some have been bringing some aircraft back into service as demand rises.

The directive covering the 737 NG (600 to 900 series) and 737 Classic (737-300 to 737-500 series) was prompted by four recent reports of single-engine shutdowns caused by engine bleed air 5th stage check valves stuck in the open position.

The FAA said the directive is to address corrosion of the engine bleed air 5th stage check valves for both engines. The agency said that could result in compressor stalls and dual-engine power loss without the ability to restart.

Boeing said it is providing inspection and replacement information to fleet owners if they find an issue.

American Airlines and Southwest Airlines, two large U.S. operators of the 737, said they had not experienced the issues described in the directive. United Airlines said it is complying with the directive and does not anticipate an impact on operations.

(Reporting by David Shepardson in Washington; Additional reporting by Tracy Rucinski in Chicago; Editing by Steve Orlofsky and Matthew Lewis)