Boeing ‘to cut several hundred jobs’ in satellite division

Boeing Co (NYSE:BA) conveyed its thinking that it might slash hundreds of jobs in its Satellite division before the end of the current year. Also, many smaller companies depended on credit ratings provided by EXIM bank, are now experiencing hard times.

Boeing last week confirmed it had lost a satellite deal from Asia Broadcast Satellite because the company couldn’t secure financing. The satellite firm took the decision because of uncertainty regarding the future of the US Export-Import Bank (EXIM), which is the country’s export credit agency. According to the company, these reductions are necessary so that they remain competitive in the business.

The company declined to specify which part of the satellite business would be impacted by the layoffs. The bank’s government charter actually lapsed last June 30. 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.

“It is irresponsible to think that we can boost job growth while tying one hand behind the backs of exporters and manufacturers”.

ABS says it is still in talks with Boeing, but is looking to find other companies that have access to government trade credits.

The Boeing representative mentioned that uncertainty of EXIM’s future made many of Boeing’s global customers “very nervous”, as they relied on funding from the bank.

The closure of the Ex-Im Bank is undoubtedly a setback for Boeing as a substantial portion of its foreign orders was guaranteed by it. About 15% of Boeing’s customers used Ex-Im financing.

Boeing and ABS are continuing to discuss other ways to finance the satellite purchase, Taira said.

“Hardworking Americans at Boeing’s El Segundo facility, at plants and companies across our nation, deserve much, much better than to have their livelihoods jeopardized by the most cynical kind of partisan politics practiced by Tea Party Republicans”, Rep. Ted Lieu, D-Los Angeles, said.