Boeing Pursues Cost-Cutting Measures

December 30, 2020
Boeing Pursues Cost-Cutting Measures

The decline in air travel amid the pandemic has led Boeing to consider moving its commercial airplane headquarters in Washington from Renton to Everett.

Besides consolidating production of its 787 Dreamliner in South Carolina, Boeing also wants to establish a mobile leadership team by putting managers close to production and delivery facilities.


Video Spotlight: 


This post is based on the Herald Net article, A Boeing executive delivers good and bad news for Everett, by Janice Podsada, October 23, 2020; the Puget Sound Business  Journal article, Renton mayor says Boeing 737 Max production isn’t moving to Everett, by Andrew McIntosh, November 19, 2020; the FlightGlobal article, Return of 737 Max marks just one of Boeing’s comeback challenges for 2021, by Jon Hemmerdinger, December 14, 2020; and the YouTube video in the Spotlight. Image source: ©Digital Vision/Getty Images, Inc.

Discussion Questions:

1. What measures did Boeing adopt to adjust its commercial airlines’ production, in response to the fallout from the coronavirus pandemic?

Guidance: Boeing adopted various cost-cutting measures, including consolidating production of its 787 Dreamliner in South Carolina, moving the headquarters of its commercial airplane division in Washington from Renton to Everett, creating a mobile leadership team by putting managers close to production facilities, and scrutinizing every aspect of its operations to conserve money.

2.  How did the coronavirus pandemic affect Boeing’s capacity requirements planning?

Guidance: With the decline of air travel, Boeing delivered 67% less planes in the period ended September 2020 than the same period in the previous year. The wide-body jets (e.g., 787 Dreamliner) used in international travel suffered the greatest hit.  As a result, Boeing consolidated its 787 Dreamliner production in South Carolina, leaving its Everett assembly plant in a lull.

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