Business

Boeing To Lay Off Roughly 10% Of Its Workforce

Published

3 months ago

2024-10-12

Kiara Grace

Boeing’s CEO informed employees late Friday that the business planned to eliminate 10% of its total workforce “over the coming months.”

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” said Kelly Ortberg, who took over as CEO of the ailing aircraft manufacturer two months ago and has spent half of his time dealing with a strike by 33,000 hourly workers.

The revelation is only the latest blow to the beleaguered planemaker, which has suffered losses of more than $33 billion over the last five years, as well as a number of serious, often fatal, safety violations and greater scrutiny from regulators and law enforcement.

Boeing To Lay Off Roughly 10% Of Its Workforce

“Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term,” Ortberg wrote in a Friday message to employees regarding “positioning for the future.”

Ortberg’s notification did not specify how many jobs would be slashed, despite the fact that Boeing had 171,000 employees globally at the start of the year, 147,000 of whom were in the United States.

Years of challenges and losses.
Boeing has faced significant challenges for more than five years, beginning with two tragic crashes of its best-selling airliner, the 737 Max, in 2018 and 2019, which resulted in the jet’s global suspension for 20 months. It also incurred enormous losses in 2020, when the epidemic almost halted air traffic and drove airlines to reduce their purchases of new planes.

One of its more recent concerns was a door plug on an Alaska Airlines 737 Max that blew off minutes into a January 5 flight, leaving a gaping hole in the plane’s side.

While the plane landed safely with no significant injuries to passengers or crew, it spurred a new round of federal inquiries into the safety and quality of Boeing aircraft. The National Transportation Safety Board’s preliminary findings revealed that the plane left a Boeing facility two months earlier without the four bolts required to secure the door plug.

Boeing’s space and defense businesses are also losing money. The Starliner spacecraft’s first crewed trip left the two astronauts it carried trapped on the International Space Station for months, rather than the planned short visit.

Ortberg stated on Friday that the corporation should prioritize focusing resources over distributing them over multiple initiatives, which can lead to underperformance or underinvestment.

Boeing has already declared that it will implement rolling unpaid furloughs for a substantial number of its nonunion employees in order to save money during the International Association of Machinists (IAM) strike. The furloughs required the impacted employees to take one week off every four. Friday marked the conclusion of the fourth week of the strike.

The layoff decision means that the next furlough cycle will not occur, Ortberg wrote on Friday. Employees will be told about the future of their respective portions of the organization beginning next week.

“We know these decisions will cause difficulty for you, your families and our team, and I sincerely wish we could avoid taking them,” he texted. “However, the state of our business and our future recovery require tough actions.”

Losses increase during the strike.
Boeing’s debt has skyrocketed during the last five years, and the main credit rating agencies say it is in danger of being downgraded to junk bond status for the first time in its history.

Standard & Poor’s reported last week that the strike, which has halted the majority of the company’s commercial plane manufacturing, is costing them approximately $1 billion per month. Boeing makes the majority of its money when it sells a jet and delivers it.

Despite the poor financial situation, Boeing had offered IAM members a 25% raise during the four-year term of the proposed contract. However, rank-and-file union members nearly unanimously rejected the offer and opted to go on strike beginning September 13.

Boeing then increased their offer to increase salaries by 30%, but the union leadership said it was still insufficient. The union claims that the corporation can afford its salary demands despite its losses, pointing out that wages for its members account for only a small portion of an airplane’s total costs. It blames the company’s years-long losses on poor management.

Federally mediated talks between the two groups ended earlier this week. Boeing claimed late Thursday that it filed a complaint with the National Labor Relations Board ahead of the layoff announcement, alleging that the union is not bargaining in good faith, which the union refuted after the job cutbacks were disclosed.

Boeing To Lay Off Roughly 10% Of Its Workforce

“Bargaining is hard work, and Boeing keeps walking away from the table,” said Jon Holden, IAM president of District 751, which includes the majority of the strikers. “Their complaints about our plans demonstrate their desperation and serve as proof to our members that we are working for them. Our people will become more rebellious and unified as they witness Boeing repeatedly walk away and quit.”

However, wages are not the only concern. Union members are still upset that Boeing forced them to give up their traditional pension plans ten years ago when the firm was doing well financially.

The rank-and-file union members at the time narrowly agreed to the loss of pensions because Boeing threatened to relocate workers from unionized operations in Washington state to other ones it might establish abroad. Boeing canceled the threat in exchange for the loss of the pension schemes.

Boeing is unlikely to go out of business, despite its numerous issues. Airbus is the company’s only competitor in the full-size passenger plane market. However, Airbus does not have enough capacity to handle Boeing’s orders. This is due to the fact that both Boeing and Airbus have long-term order books for their aircraft. If airlines cancel their orders with Boeing, they will have to wait five years for a comparable Airbus jet.

Among the programs being eliminated is the 767 jet, which is now solely constructed as a freighter. Boeing will terminate that plane after the current orders are completed and delivered to clients in 2027. That plane was manufactured by some of the union members who are currently on strike.

The union published a statement stating the announcement regarding the 767’s discontinuation “is very troubling, particularly given the current state of negotiations.” It stated that any decision about the 767 years in the future would have nothing to do with the current strike.

“Boeing is trying to bargain in the press. “It will not work and is detrimental to the bargaining process,” Holden stated. “They are seeking to deal directly with the membership, sowing seeds of mistrust and division within our union. They seek to create a schism inside our union. There is no prospect of that happening. We are stronger than ever and united at every picket line.”

Ortberg also announced that Boeing’s newest widebody passenger airliner, the 777X, will be delayed even longer. The corporation had previously reported that it had been forced to cease test flights due to technical issues. “We have notified customers that we now expect first delivery in 2026,” he stated in an email.

SOURCE | AP

Business

Chinese Automaker BYD Slams Reports That Factory Conditions Are Poor In Brazil

Published

7 minutes ago

2024-12-26

Salman Ahmad

(AP Photo/Ng Han Guan, File)

(VOR News) – BYD, the Chinese manufacturer, has released a statement addressing concerns concerning adverse conditions at a construction site in Brazil where the business is building a facility.

The assertion claims that the accusations aim to “discredit” China and its enterprises. At the week’s outset, a task force led by Brazilian prosecutors declared the rescue of 163 Chinese people subjected to conditions akin to slavery at the location.

The Labor Prosecutor’s Office recorded a video of the workers’ dormitories, which displayed beds lacking mattresses and rudimentary kitchen facilities.

BYD spokeswoman Li Yunfei strongly opposed the issue on Weibo.

The statement additionally condemned the media’s portrayal of the incident. “The statement indicated that foreign entities are intentionally maligning Chinese brands, disparaging China, and seeking to jeopardize the relationship between China and Brazil.”

BYD, an acronym for “Build Your Dreams,” is a prominent maker of electric automobiles globally. On Monday evening, the corporation declared its intention to “immediately terminate the contract” with the Jinjiang Group, the contractor responsible for the factory’s construction, and stated that it was “evaluating other suitable measures…”

BYD announced that the employees at Jinjiang will be accommodated in nearby hotels temporarily and that they will not suffer negative consequences from the decision to halt operations at their workplace.

The corporation announced that it had been altering the working conditions at the construction site in recent weeks and had notified its contractors that “adjustments” were necessary.

Li’s tweet on Weibo included what it said to be a “declaration” from the Chinese workers at the site. The tweet included a video depicting individuals seated together in a room. The men’s thumbprints were crimson.

The video depicted a worker articulating a statement asserting that allegations of impoverished and “slave-like” conditions violated their human rights and that these difficulties stemmed from misunderstandings.

BYD should continue our employment here.”

Upon completing his work, the employees applauded. Prosecutors asserted that the sanitation conditions at BYD’s site were notably inadequate. There was one toilet for every 31 workers, necessitating their rise at four in the morning to line up and be prepared for work by five thirty.

Brazilian law defines conditions akin to slavery as defined by the worker’s subjugation to coerced labor or excessive working hours, acceptance of deplorable working conditions, and limitations on the worker’s freedom of movement.

Brazilian officials reported that Jinjiang Construction Brazil confiscated the workers’ passports and retained sixty percent of their wages, in addition to the substandard living conditions imposed on the workers.

The labor office’s statement indicates that employees who resign must reimburse the corporation for their travel expenses to China and return ticket costs.

The employees’ statement indicates that the passports were taken to enable the corporation to file work permits and other procedures that the employees could not accomplish independently due to language barriers.

Jinjiang Construction Brazil has reported that it is undergoing “frequent and intensive inspections by the BYD local labor department in Brazil.”

The labor department’s disclosed information was characterized as false, particularly the claims that the Jinjiang laborers were ‘enslaved’ and ‘rescued,’ which are entirely contradictory to the facts. This arose from cultural disparities, BYD translation difficulties, and comprehension difficulties regarding the content.

A declaration was issued asserting that the staff were enthusiastic about engaging with the media on the topic.

In numerous regions of the developing globe, the living conditions of migrant construction workers might be exceedingly inadequate. Moreover, such labor occasionally entails contracts that compel workers to reimburse BYD substantial sums of money expended to secure their positions, despite legal prohibitions against such agreements.

SOURCE: AP

Business

Walmart Charged With Unlawfully Establishing Bank Accounts for 1 Million Drivers

Published

2 days ago

2024-12-24

Salman Ahmad

Photo: Reuters

(VOR News) – The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Walmart and a fintech company called Branch Messenger, alleging that the two companies forced more than a million delivery workers to use costly bank accounts to receive their paychecks. Both of these companies were the targets of the lawsuit.

According to the action filed by the Consumer Financial Protection Bureau (CFPB), Walmart and Branch are accused of opening deposit accounts for Walmart’s Spark Drivers, who are considered independent contractors, without first getting their consent.

These bank accounts contained drivers’ personal data, including their Social Security numbers.

The lawsuit specifically claims that Walmart’s drivers, who are in charge of delivering goods from the company’s warehouses to consumers, are only allowed to have their earnings transferred into these branch accounts.

This goes against the company’s rules, which permit them to move their earnings to different accounts.

Walmart reportedly told employees in 2021 that using these accounts may lead to firing.

Additionally, the lawsuit claimed that accessing profits through the accounts was a “complex process,” typically causing weeks-long delays. Among the other accusations that were made was this one.

This was the predicament they ultimately found themselves in, even though the business had assured them that they would have prompt access to funds.

To make matters worse, according to the Consumer Financial Protection Bureau (CFPB), drivers allegedly paid ten million dollars in “junk fees” to move their earnings to different bank accounts.

Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, said, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” in his criticism of the practice. “Junk fees are a waste of money.”

This case’s next section outlined the traits of the average Spark Driver: “in addition to being a woman, having children, not having a college degree, and having a low income.”

Walmart denied the accusations made by the Consumer Financial Protection Bureau (CFPB) and stated in a statement that it will firmly defend itself in court.

Walmart released a statement claiming that the Consumer Financial Protection Bureau’s (CFPB) hurried lawsuit is full of factual errors, exaggerations, and blatant misrepresentations of basic legal principles.

The Consumer Financial Protection Bureau (CFPB) never gave Walmart a chance to make its case in an unbiased way throughout its rushed probe. In contrast to the Consumer Financial Protection Bureau, we are ready to fiercely defend the Company before a court that respects the due process of law principle.

Additionally, Branch was charged by the Consumer Financial Protection Bureau (CFPB) with engaging in deceptive advertising and neglecting to look into and address issues pertaining to the accounts. In addition to earlier accusations, these were also made.

In contrast, Branch denied the accusations and defended its services, saying, “The Consumer Financial Protection Bureau rushed to file a lawsuit despite the company’s extensive cooperation with its investigation, refusing to engage with Branch in any meaningful way about this matter.”

Branch responded to the Walmart accusations with a statement.

Furthermore, Branch claimed that the case was motivated more by a desire for “media attention” than by concerns for the welfare of the employees. This is what he stated in his statement.

This case, which is part of a larger campaign to give these gig workers more rights, targets these individuals who work for firms like Uber, Lyft, and DoorDash who are supposed to be independent contractors. It is considered that gig workers are independent contractors.

Earlier this month, the Consumer Financial Protection Bureau (CFPB) made claims against large financial firms, including Wells Fargo, Bank of America, and JPMorgan Chase.

According to the CFPB, these organizations did not stop fraud on the money-sending app Zelle, which is a platform that lets people send and receive money.

The choice of a new director may have an impact on the outcome of this lawsuit because President-elect Donald Trump is expected to choose a replacement for the present director of the Consumer Financial Protection Bureau (CFPB).

When Jaret Seiberg was employed as a financial services policy analyst at TD Cowen Washington Research Group, she noted that the new director’s strategy for handling such matters would be the deciding element in the case’s future course.

SOURCE: TN

Business

Naked Wines Issues 2024 Performance Review

Published

3 days ago

2024-12-24

Geoff Brown

Naked Wines claims to be in 'better position' despite falling sales

Naked Wines, an online retailer, has issued a performance review after announcing that sales declined 15% in the first half of the year to $112.3 million, despite management insisting it is in “a better position, both financially and strategically”.

Rodrigo Maza, who became CEO in February after joining the company as UK managing director in September 2023, stated that the company was in a better financial and strategic position, with “robust financial foundations” and committed and engaged members.

“Our strategic initiatives centred around customer acquisition and retention are generating learnings, and we are currently experiencing solid trading during the peak season period,” he told shareholders.

It also stated that a performance review is under underway in order to “proactively evaluate options to maximise shareholder value”. The end of the fiscal year will see the release of a report.

Naked Wines New CEO

He also welcomed new CFO Dominic Neary, who joined Naked Wines from Mind Gym in November, saying he was excited to collaborate with him “as we focus the business on cash, profitability, and growth with its rose wine and dry white wine.”A performance review is presently ongoing to “proactively evaluate options to maximise shareholder value,” according to the results, with a report expected to be released at the end of the fiscal year.

It also stated that it has continued to liquidate surplus inventory, with the UK and Australia returning to normal inventory levels, however US inventories remained “significantly” in excess, albeit being down $20.5 million from HY24.

It stated that it was “currently investigating options to reduce inventory levels more quickly,” which would help drive improved cash over the next two fiscal years, but “could lead to increased liquidation costs and result in EBIT at the lower end of guidance.”

Although active members (those with Angel or Wine Genie membership) declined 12% in the last 12 months, the statement noted retention of its ‘core’ members (those who had been customers for two years or more) was up two percentage points to 79%, and they remained “highly engaged”.

Customers’ total probability to refer the company to a friend (net promoter score) increased from 73 to 76 in the previous quarter, according to the report.

Turning Things Around

In August, the company reported a pre-tax loss of $16.3 million for the fiscal year ending 1 April 2024, up from $15 million in the fiscal year 2022/2023, with revenues down 18% to $290 million and repeat business down a quarter to $65 million.

Founder Rowan Gormley, on the other hand, asserted that the company was “making real progress in turning things around with its rose wine and dry white wine”.

It came after the engagement of debt consultants in March 2024 to look into refinancing possibilities and a possible wine company reorganization after the value of Naked Wines shares fell by about a third in the previous year.

Gormley increased his interest in Naked Wines significantly in December 2023, purchasing $9,600 in shares.

This was Gormley’s second round of stock purchases; he and other senior board members purchased a large number of shares in early November following a drop in share value after the firm stated it was lowering its full-year sales estimates to -12% to -16%.

Three of the company’s leaders at the time put a total of $94,000 in its stock.