Boeing Temporarily Halts Work at Seattle-Area Factories

(Bloomberg) -- Boeing Co. is shutting down its Seattle-area manufacturing hub for two weeks after a worker died of coronavirus complications, adding to a wave of plant closings sweeping the globe as the aviation industry navigates the biggest disruption in decades.

Activity at the factories will start winding down now and come to a halt March 25, Boeing said in a statement Monday. The company will conduct deep cleaning at the facilities, which range from a wide-body plant in Everett, about 25 miles (40 kilometers) north of Seattle, to parts-fabrication plants south of the city. Workers will receive 10 days of paid leave.

The aerospace giant is pausing operations as the Covid-19 pandemic upends the airline industry and threatens the health of the planemaker’s own workers in the Seattle area, a hot spot of the outbreak. Boeing is also assessing the health and safety of workers at its 787 Dreamliner plant in South Carolina, the company’s last jetliner factory to remain in operation.

“The fight to save lives by halting the spread of Covid-19 around the world is demanding actions that few of us could have imagined even a few weeks ago,” Boeing Chief Executive Officer Dave Calhoun said in a note to employees. “It has to be the top priority for all of us -- individually and collectively -- to do what’s possible to help stop the pandemic now.”

The drastic move bolsters Boeing’s case for a $60 billion U.S. bailout, Bank of America Corp. analyst Ron Epstein said in a report -- and investors cheered. Boeing spiked 11% to $105.62 at the close in New York, the biggest gain since October 2008. The shares have tumbled 68% this year, the worst drop on the Dow Jones Industrial Average.

Employee Impact

Boeing is also halting operations at a site in eastern Washington where grounded 737 Max jets are parked. Airbus SE, its European rival, started reopening its factories after sanitizing surfaces against a virus that can linger for days.

So far, 32 Boeing employees have contracted the virus, with the bulk of the cases occurring in Washington state. The company’s jetliner division is headquartered in Longacres, south of Seattle.

Earlier this month, the manufacturer ordered employees who can work from home to do so. The company has been coordinating with local authorities as cases started to crop up in the gigantic Everett factory, which makes twin-aisle models from the 747 jumbo to the KC-46 tanker.

The first Boeing worker to die from the virus was a resident of Everett, Mayor Cassie Franklin said in a message on the city’s website. She thanked Boeing for closing the 1,000-acre facility “to help keep our residents and workers healthy and safe.”

Union Support

IAM District 751, which represents 31,000 Boeing workers in the Puget Sound region, also supported the factory shutdowns in a message to members. The union said it is negotiating unemployment benefits for those whose underlying health conditions would prevent them from returning to the workplace.

The temporary halt will add to the pressure on Boeing’s finances as the Chicago-based manufacturer lobbies the Trump administration and Congress for taxpayer assistance. Underscoring the strain, General Electric Co. -- a key Boeing supplier -- said earlier that it would cut 10% of its aviation division’s U.S. workforce.

The Everett factory costs Boeing about $750 million a month to operate, including fixed expenses and labor costs, according to estimates from Melius Research analyst Carter Copeland.

©2020 Bloomberg L.P.

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