The move is a follow-up to the downturn in the military spending in the Americas, as well as, delays in commercial orders for satellite, Reuters reported.
Advertisement
Boeing spokesman Tim Neale confirmed the reductions to the news agency and said the number of affected employees would be finalized in coming months.
Boeing Co. plans to lay off hundreds of workers in its satellite division, including some at its El Segundo facility, by the end of the year, prompting one local congressman to call for action in Washington, D.C., to protect workers. Boeing intends to restructure its workforce in the division to remain competitive for ongoing and future business.
The Boeing announcement marks the latest fallout from the ongoing debate about the future of EXIM, the U.S. government’s export credit agency, which can no longer write new loans and trade guarantees. Citing the internal memo, the loss of ABS contract was blamed indirectly to the uncertainty of Boeing’s major creditor, US Export-Import Bank (EXIM).
Neale mentioned that many of Boeing’s global customers relied on funding from EXIM Bank to buy commercial planes and satellites.
“While this is not exclusively being caused by the expiration of Ex-Im Bank, this is a factor for the customers who have chose to maybe hit the pause button or look somewhere else”, a company spokesman told The Wall Street Journal.
Neale said Boeing officials were still working with ABS, based in Bermuda and Hong Kong, to find an alternate financing solution, but ABS was in active discussions with other satellite makers that had access to government trade credits.
This summer, House Republican leaders succeeded in their quest to shut down the bank, which helps U.S. companies sell their goods overseas. Business executives have said it is unclear if the bank will be reopened.
Advertisement
Uncertainty about EXIM’s future was making global buyers “very nervous”, he added, and there was only so much credit the company could provide itself. The company will have to do the role of a lender also in the absence of EXIM Bank financing.
