The Boeing Co. temporarily suspended manufacturing at its operations at in the Puget Sound area of Washington, responding to the ongoing effort to contain the spread of the Covid-19 virus. "This necessary step protects our employees and the communities where they work and live," said Boeing president and CEO Dave Calhoun, in a statement. "We continue to work closely with public health officials, and we're in contact with our customers, suppliers and other stakeholders who are affected by this temporary suspension."
Washington state has been among the areas of the U.S. most seriously affected by the Covid-19 pandemic, with 1,996 confirmed cases and 95 deaths as of March 22. One Boeing employee has been among those who have died, local media reported.
Boeing's assembly operations in South Carolina are not affected by the decision.
The move follows Boeing's indication that it will seek a $60-billion federal aid package to support domestic aerospace supply chain. In addition, it will suspend paying dividends to shareholders, CEO Calhoun will forego his salary, and its previously propounded embargo on share buybacks will remain in place indefinitely.
The Covid-19 pandemic has hit airlines and the aerospace sector hard but Boeing's problems extend further, to the grounding of the 737 MAX aircraft in March 2019 and the following drop-off in new orders.
Boeing said it would be reducing production activity on Monday, March 23, and projected the suspension would begin on Wednesday March 25, lasting 14 days.
The Puget Sound area includes two major aircraft assembly operations, at Everett, Wash. (where the Boeing 747, 767, 777, and 787 series wide-body aircraft are assembled) and Renton, Wash. (where the 737 narrow-body jets are assembled), as well as numerous supporting operations.
Employees who can work from home will continue to do so, while those who cannot work remotely will receive paid leave for the initial 10 working days of the suspension.
"We will keep our employees, customers and supply chain top-of-mind as we continue to assess the evolving situation," Calhoun said.
Boeing added it will continue to monitor government guidance and actions on Covid-19 and its impact on all company operations. "During this time, we will be conducting additional deep cleaning activities at impacted sites and establishing rigorous criteria for return to work," the company stated.
The company said that after the work suspension it will take an orderly approach to restarting production.
Puget Sound area-based employees who can work from home will continue to do so. Those who cannot work remotely will receive paid leave for the initial 10 working days of the suspension – double the company policy – which will provide coverage for the 14 calendar day suspension period.
"We will keep our employees, customers and supply chain top of mind as we continue to assess the evolving situation," Calhoun said. "This is an unprecedented time for organizations and communities across the globe."
When the suspension is lifted, Boeing will take an orderly approach to restarting production with a focus on safety, quality and meeting customer commitments. This will be a key step to enabling the aerospace sector to bridge to recovery.
