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Boeing corporation crisis.

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Date: May 28, 2002 To: From: Subject: Report Transmittal Attached is a report of the biggest crisis that the Boeing Corporation has ever faced in its existence. First it will describe the events leading up to the problem before it became a public issue. Then we will discuss in extensive detail exactly what the problem is that Boeing is facing and how they can overcome it. The team of xxx completed the research and the written report of the crisis. Boeing is an international supplier of commercial airline planes, military defense aircraft, and surveillance. Partially due to the September 11th attacks on the United States, the Boeing Corporation will be laying off 30,000 employees from their nationwide facilities. The layoffs will affect cities such as Los Angeles, Seattle, Houston, St. Louis, Philadelphia, and will affect employees from entry level to executive offices. The announcements of these issues have caused Boeing's stock to fall to a surprising low and production levels to drop dramatically. XXX would like to thank XXX for giving us the opportunity to complete this research assignment. The research helped us learn how to more efficiently utilize the different databases available to us and put it into a format so it can be presented to a public organization or the media. The skills learned in the duration of completing this report will be able to be utilized when presenting to upper management a detailed issue and solutions to a specific problem. Boeing Corporation Crisis Cal State Fullerton Jean Fuller May 28, 2002 Executive Summary Today the Boeing Corporation is facing one of the largest crises in the history of the company. They are in the process of laying off a total of 30,000 employees from their facilities nationwide. The layoffs will take place in cities such as Los Angeles, Seattle, St. Louis, Philadelphia, and Atlanta. Most of the layoffs affect the commercial airline division, but the military defense and aerospace divisions will also be affected. ...read more.


Boeing's commercial airplane division is not the only division that the layoffs will effect. Surprisingly 5,000 of the 30,000 layoffs are predicted to come from the military division. The military division cutbacks are also due to the September 11th attacks, but they are mainly due to global economic slowdown (Klein, 2001). This comes as a surprise because the military division is expected to grow in a time of war or terrorist attacks. Stockholders may assume that the government will request an increased level of production of fighter jets and military bombers so that the United States can dominate in the war against terrorism. In addition, the layoffs will not only affect the Boeing employees, but also people outside the company. As many as 20,000 of the Boeing layoffs may occur in the Seattle area alone, resulting in an additional 34,000 jobs lost by Boeing suppliers, subcontractors, and others (Klein, 2001). Alternatives Before Boeing implements any solutions they must maintain a good level of communication with their employees. The employees must know the reasons for a particular action taken by Boeing in order to avoid any mistrust and confusion (Hoffman, 2001). For example, an employee will wonder why layoffs are taking place when Phil Condit, Boeing's CEO, is making an annual bonus of $1.13 million (Webber, 2002). Boeing must carefully explain their plans and what they are hoping to accomplish through their actions. Boeing can reduce the amount of layoffs by implementing any of the following solutions: Distribute Hours Among Employees The first solution for Boeing is to spread the hours among the employees for each department. Every department is given so many hours it can use for each week at the beginning of the quarter, depending on the amount of business Boeing has. If those hours taken and spread among the employees for each department, not as many layoffs will occur. The hours will be spread out by reducing the workweek from five days to four. ...read more.


The News Tribune, Tacoma. Retrieved April 10, 2002, from www.dowjonesinteractive.com Gillie, J.F. (2001, December). 1,700 new layoff notices today. The News Tribune, Tacoma. Retrieved April 10, 2002, from www.dowjonesinteractive.com. Article No. TCMA0135500 Global general aviation industry delivery breakdowns for jets. (n.d.). Retrieved April 10, 2002, from http://rdswebl.rdsinc.com/texis/rds/suite.html. Hoffman, R. (2001, June 29). The Dynamics of Downsizing. Retrieved May 18, 2002, form www.hradvice.com Holmes, S.C. (2001, November 26). Aerospace industry downsizing. Business Week, (3759), 108-109 Klein, A. (2001, October 13). Boeing faces massive layoffs. The Washington Post. Retrieved April 15, 2002, from http://detnews.com/2001/business.html. Laing, J.R. (2002, April). Gaining Altitude: Corporate profiles. Barron's, 82 (17), 21-25. Lloyd, M.K. (2001, December). Losing Altitude; Aviation. The Economist, 361 (8253), 81-83. More Boeing layoff notices going out. (n.d.) Retrieved April 26, 2002, from www.seattleinsider.com Nyhan, P.J. (2001, September). Boeing expects to layoff up to 10 percent in commercial division. Seattle Post-Intelligencer. Retrieved April 10, 2002 from www.dowjonesinteractive.com. Article No. SEPI012700. Nyhan, P.J. (2002, February). Boeing lays off 1,000 local workers. Seattle Post-Intelligencer. Retrieved April 10, 2002, from www.dowjonesinteractive.com. Nyhan, P.J. (2001, November). Majority of Boeing layoffs to hit by June. Seattle Post-Intelligencer. Retrieved April 10, 2002, from http://seattlepi.nwsource.com Schneider, R. (2001, December). Losing Altitude: aftershocks from September 11th. The Economist. Retrieved April 10, 2002, from www.infotrac.com. Article No. A81118376. Smith, B.A. (2002, January 21). Boeing continues its production cost focus. Aviation Week & Space Technology, 156 (3), 43-44. Smith, B.A. (2001, September 24). Boeing cuts delivery estimates, prepares for major layoffs. Aviation Week & Space Technology, 155 (13), 29-32. Song, K.M. (2001, December). Boeing layoff face challenge. The Seattle Times. Retrieved April 10, 2002, from www.dowjonesinteractive.com. Article No. SETL0135600. Song, K.M. (2002, April). Effects from Boeing cutbacks felt. The Seattle Times. Retrieved May 18, 2002, from www.dowjonesinteractive.com. Article No. SETL0211100. Standaert, J. (2002, January). Boeing trims 2,300 more jobs. The News Tribune, Tacoma. Retrieved April 10, 2002, from www.dowjonesinteractive.com. Article No. TCMA0201900. Thomas, G.D. (2002, April). Tough times ahead. Air Transport World, 39, (4), 31-33. Webber, J.P. (2002, April 19). Boeing hurt by slowdown. Los Angeles Times. Retrieved May 8, 2002, from www.latimes.com ...read more.

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