Boeing to Lay Off Hundreds of Workers at Satellite Business

Boeing Co. said Monday it had started issuing notices for what could be hundreds of layoffs at its satellite business, a move it blamed partly on the stalled reauthorization of the U.S. Export-Import Bank, which supports many of its sales.

The aerospace giant expects to lay off "several hundred" workers over the coming months and into early 2016, a company spokesman said. Boeing last week confirmed it had lost a satellite deal from Asia Broadcast Satellite because the company couldn't secure financing.

"While this is not solely being caused by the expiration of Ex-Im Bank, this is a factor for the customers who have decided to maybe hit the pause button or look somewhere else," the spokesman said of the planned job cuts.

Boeing has cut thousands of jobs in its defense arm over the past four years, citing the impact of Pentagon budget cuts. News of the layoff plan at the satellite business was reported earlier by Reuters.

The Ex-Im Bank was closed to new business from July 1 after Congress failed to reauthorize its charter, curtailing future financing commitments. The U.S. satellite manufacturing relies heavily on export financing, accounting for 60% of international satellite sales.

The credit agency's loans and guarantees are also used by Boeing's commercial jetliner business and industrial-equipment manufacturers such as General Electric Co. and Caterpillar Inc.

Boeing declined to say what portion of its satellite business, which is largely based in Southern California, will be affected by the cuts.

The spokesman also cited recent rocket-launch failures as delaying subsequent business and "weak" U.S. Department of Defense and international spending.

Boeing has been lobbying to put Ex-Im back on the congressional agenda following the summer recess, raising pressure on lawmakers to reactivate the bank.

The Boeing spokesman said it wouldn't likely significantly tap its own commercial-financing organization to save satellite deals. Boeing's in-house finance arm is primarily focused on civil aircraft financing deals.

"That is really, really limited," said the spokesman. "We can't run a healthy business organization if we're suddenly adding large financing commitments to our portfolio."

Write to Jon Ostrower at [e-mail]

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August 24, 2015 21:45 ET (01:45 GMT)

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