By Andrew Tangel and Thomas Gryta
Boeing Co. said it would suspend airliner production in the
Seattle area and General Electric Co. said it would lay off workers
making jet engines for customers including the aerospace giant, as
the coronavirus pandemic places a heavy drag on U.S. industry.
Many manufacturers have kept factories running even as confirmed
cases of the virus have multiplied in the U.S. But more companies
are closing at least some of their plants as demand plummets and
some of their workers test positive for coronavirus.
Recreational-vehicle makers Winnebago Industries Inc. and
Polaris Inc. said Monday that they were suspending some
manufacturing operations. Harley-Davidson Inc. and U.S. car makers
have also curtailed or suspended some production in recent
Lower vehicle production means lower demand for steel, too.
Luxembourg-based ArcelorMittal SA, the world's largest steelmaker
by production, said Monday that it plans to idle a furnace at its
Indiana Harbor Works, in East Chicago, Ind., and another at its
Dofasco mill in Hamilton, Ontario.
Boeing said it would halt production at its plant in Everett,
Wash., for 14 days starting Wednesday. The factory produces the 787
Dreamliner and other widebody aircraft. The company said it would
do a deep-cleaning of the facility during the suspension.
At least 32 Boeing employees have tested positive for the virus
as of Monday, including 25 who work in the Seattle area, the
company said. One Boeing worker at the Everett factory died over
the weekend from suspected complications related to Covid-19, the
illness caused by the virus, according to a union official and a
person familiar with the matter. The death was earlier reported by
the Seattle Times.
Boeing is also halting production of military versions of its
jetliners, including refueling tankers for the Air Force.
"This necessary step protects our employees and the communities
where they work and live," said Boeing Chief Executive David
Boeing is leading an effort to secure at least $60 billion in
government and private-sector aid for the aerospace industry, with
an unspecified portion for itself.
GE Chief Executive Larry Culp said the company wasn't seeking a
government bailout, but supported efforts to assist the aviation
industry and the broader economy.
"What we don't know about the magnitude and duration of this
pandemic still outweighs what we do know," Mr. Culp said.
Some 36,000 Boeing employees work at the Everett plant,
including engineers and other white-collar employees. Boeing said
workers who can't work remotely during the suspension will receive
paid leave for the initial 10 working days of the suspension.
The scope of the toll that the pandemic will exact on
manufacturers around the world is uncertain. Some factories in
China have reopened after closing for weeks as the outbreak took
off there early this year.
Boeing rival Airbus SE said Monday that it planned to restart
production at facilities in France and Spain that had been idled
temporarily because of local travel restrictions and
But the damage in the U.S. is still mounting. GE said it would
lay off about 10% of the U.S. workforce in its jet-engine business,
or about 2,500 employees, one of the first major job cuts at a big
American manufacturer as a result of the pandemic.
GE also said as many as half of the maintenance and repair
employees in its biggest and most profitable business would also be
furloughed for three months. The unit makes and maintains engines
for Boeing and Airbus planes. GE said the moves would save $500
million to $1 billion.
GE had been restructuring its operations and trying to pull out
of a slump caused by weak demand for its power-generation equipment
and troubles in its GE Capital unit.
Before the coronavirus outbreak, GE had projected improving cash
flow from its industrial operations. Even so, its aviation unit had
been battling a slowdown in production caused by the grounding of
the Boeing 737 MAX jet after two fatal crashes. Boeing suspended
MAX production in January.
The GE Aviation unit, with 52,000 employees world-wide,
previously enacted a hiring freeze, canceled merit-based raises,
cut nonessential spending and made cuts to its contingent
The coronavirus pandemic has emerged as the biggest blow to the
global aviation industry in decades. Commercial travel has slowed
precipitously as airlines have grounded large portions of their
fleets. Boeing has suspended its dividend and drawn down credit
lines, but so far avoided layoffs.
Boeing and GE's CEOs will forgo their salaries this year, the
companies said, while GE Aviation CEO David Joyce plans to give up
half his salary.
ArcelorMittal said it is working with the United Steelworkers
Union to transfer dislocated workers at the Indiana Harbor plant to
other available jobs. ArcelorMittal said no jobs would be affected
by the furnace shutdown in Canada.
ArecelorMittal said it hasn't ruled out additional shutdowns at
mills to align production with reduced demand for steel. The
company said last week that it is reducing production at several
European mills because of the pandemic.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Thomas Gryta
(END) Dow Jones Newswires
March 23, 2020 18:02 ET (22:02 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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