Boeing planning for 100s of cuts in North Charleston, report says

EVERETT, Wash. (WCIV) - A report in the Wall Street Journal Thursday evening said Boeing Co. is planning to cut hundreds of workers at its North Charleston 787 production facility.

The report cites an unnamed source in the company, who said the cuts are part of a cost-reduction measure that's been planned for a while, but also facilitated by battery issues with the company's newest aircraft.

The cuts, according to the Journal are expected to take place over the course of 2013 and could lead to a reduction in force by as much as 20 percent for some teams. There are currently more than 6,000 employees at the North Charleston facility.

Overheating problems of the batteries led to the grounding of the existing fleet across the globe. It has also caused the company to halt all deliveries until a solution could be found for the battery problems.

The cuts will focus on contract labor and some internal employees by not replacing people who leave or are promoted, Boeing North Charleston officials confirmed Thursday.

Boeing North Charleston's spokeswoman Candy Eslinger said Thursday night that the cuts had been planned all along as part of a path to less reliance on contracted workers.

"Across Boeing we're constantly evaluating our employment levels in light of the business environment we face, the challenges ahead and the needs of each organization. In 2013 Boeing expects to hire between 8,000 and 10,000 people, with overall employment levels at year-end anticipated to be flat or slightly down," Eslinger said.

But the planned cuts came long before the battery issue presented itself to Boeing.

According to the Wall Street Journal, cuts began last year. While the battery issue prevented delivery of new 787s, the company told the newspaper that its production has not been affected.

The Journal speculated the efforts to cut workforce were part of a measure to cut down on the cost of producing the 787s because, according to cited analysts, the aircraft cost $100 million more to produce than they are making in revenue.

Boeing spokesman Marc Birtel told the newspaper that Boeing North Charleston's use of contract labor while in the initial build up is standard for the industry.

The Wall Street Journal said many of the contractors had been offered permanent positions inside the company, but those offers have been largely rejected because of pay disparity between contractors and direct employees of the company.

According to the Journal's report, Boeing is looking to end contracts early or not renew with its contracted workforce at the North Charleston facility as well as two other smaller facilities.

"As we progress in improving efficiencies in our processes, training our entry-level employees, and growing the experience of our team in South Carolina, we expect to continue to reduce reliance{}(on contract labor) to meet our production objectives," Birtel told the Wall Street Journal.