The Boeing 702HP satellite bus is popular with satellite providers worldwide [CREDIT: Boeing]

Boeing to cut 'several hundred' jobs in satellite division

Boeing said it expects to cut "several hundred" jobs in its satellite division, due to lower US military spending and delays in commercial satellite orders.

The news was disseminated to key managers in an internal communication and Boeing spokesman Tim Neale confirmed the reductions and said the total number of people affected would be finalised in the coming months.

According to the announcement, a recent series of launch vehicle failures, alongside uncertainties about the future availability of financing from the US Export-Import (EXIM) Bank (whose government charter lapsed on June 30), were holding up multiple commercial orders.

Neale said the reductions were "necessary to remain competitive for ongoing and future business", but added that some of those who lose their jobs could find work in other parts of Boeing.

The news comes just over a month after commercial satellite provider ABS cancelled a large satellite contract with Boeing due to uncertainty about the future of the EXIM bank, which Neale said many of Boeing's international customers relied on to buy commercial satellites and airplanes.

The US government's export credit agency can no longer write new loans and trade guarantees after Tea Party conservatives in the US Congress did not vote to renew the agency's charter, arguing the trade bank provides "corporate welfare" for big companies like Boeing and General Electric.

Those in favour of EXIM say it generates revenue for the US government and also helps level the playing field for US companies whose rivals in other countries receive similar trade credits. Business executives have said it is unclear if the bank will be reopened.

Neale said Boeing officials were still working with ABS to find an alternate financing solution, but that ABS was in active discussions with other satellite makers that had access to government trade credits.

Uncertainty about EXIM's future was making international buyers "very nervous", he added, and there was only so much credit the company could provide itself.

"In the absence of EXIM, Boeing may need to serve as the lender of last resort, but there are real limits to how much of this the company can do," he said.

Recent articles

Info Message

Our sites use cookies to support some functionality, and to collect anonymous user data.

Learn more about IET cookies and how to control them