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Labor secretary Su in Seattle to meet both parties

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Boeing ( BA ) plans series of meetings on job cuts, sources say

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Emirates Airline president slams delay, voices funding

concerns

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Shares fall 1.3%

(Adds Boeing and union comments, context)

By Allison Lampert, David Shepardson and Tim Hepher

Oct 14 (Reuters) - Thousands of Boeing ( BA ) staff will get

layoff notices within weeks, a union and industry sources said,

as a senior U.S. official flew to Seattle to try to ease a

crippling strike and a major airline issued a warning over the

planemaker's deepening turmoil.

Acting U.S. Labor Secretary Julie Su's first in-person

intervention comes days after Boeing ( BA ) unveiled plans to

cut 17,000 jobs and take $5 billion in charges, continuing a

year of tumult for the company.

"Acting Secretary Su is meeting with both parties today to

assess the situation and encourage both parties to move forward

in the bargaining process," a Department of Labor spokesperson

said on Monday.

While Su has previously spoken with Boeing ( BA ) and the striking

West Coast factory workers' union, it is her first time in

Seattle meeting both sides in person.

The International Association of Machinists and Aerospace

Workers (IAM) said its lead negotiator, Jon Holden, had updated

Su on the current talks, "stressing the Union's commitment to a

negotiated contract that values our members' skills and

dedication."

Boeing ( BA ) and a White House spokesperson declined to comment on

Su's visit.

Roughly 33,000 workers have been on strike since Sept. 13,

seeking a 40% wage increase over four years.

Boeing ( BA ) will next month send out 60-day notices to thousands

of workers including many in its commercial aviation division,

meaning those staff will leave the company in mid-January, one

source familiar with the matter said.

A second phase of notices, if needed, could be rolled out in

December, the source said.

A spokesperson for the Society of Professional Engineering

Employees in Aerospace, which represents Boeing ( BA ) engineers, said

the company informed the union on Monday that 60-day notices to

its members would be issued on Nov. 15.

A Boeing ( BA ) spokesperson said the company had shared

information with managers including plans for 10% reductions at

its commercial unit involving both union and non-union workers.

The spokesperson added that the striking IAM employees were not

currently affected.

Brian Bryant, the IAM's international president, called the

job cut plan "corporate greed at its worst".

"Boeing ( BA ) just turned its back on 17,000 of its own workers -

the same people who carried Boeing ( BA ) through crisis after crisis,

year after year," he said in a statement.

Shares of the aerospace giant fell 1.3% to close at $148.99

on Monday, following the company's surprise after-hours job cut

announcement on Friday, which also included a new delay to the

777X jetliner and the ending of civil 767 freighter production.

Boeing ( BA ) will refrain from asking for voluntary departures to

limit severance cash and avoid an exodus of skills, sources

said, adding the company will rely solely on involuntary

layoffs. Rivals are scooping up scarce labor to relieve pressure

on aerospace supply chains.

"The trick will be not losing the 10% of people you want to

keep, which is even more important than usual in the post

pandemic skill shortage environment," said Agency Partners

analyst Nick Cunningham.

Boeing ( BA ) has been hiring workers to prepare for higher

production rates that have not materialized as output was capped

by regulators following the blow-out of a door plug on an Alaska

Airlines jet in January.

INDUSTRY ALARM

The one-year delay in 777X deliveries to 2026 was widely

expected in the industry and brings the lag in delivery of the

777 mini-jumbo successor to six years amid certification and

testing delays.

Emirates Airline President Tim Clark, whose initial order

for 150 jets helped launch the world's largest twin-engined jet

more than a decade ago, hinted at commercial repercussions.

"We will be having a serious conversation with them over the

next couple of months," he said in a statement. "I fail to see

how Boeing ( BA ) can make any meaningful forecasts of delivery dates."

He also became the first senior industry figure to

articulate fears, whispered privately by some industry leaders

in recent weeks, over Boeing's ( BA ) ability to tackle its worst-ever

crisis intact.

"Unless the company is able to raise funds through a rights

issue, I see an imminent investment downgrade with Chapter 11

looming on the horizon," Clark told the Air Current, an aviation

industry publication.

Emirates is the largest user of the 777 jet family, a

long-distance workhorse whose original success has been clouded

by delays to its successor and the crisis engulfing Boeing's ( BA )

smaller 737 cash cow over safety and quality issues.

Friday's package of announcements showed Boeing ( BA ) has just

over $10 billion of gross cash, a much-touted level that

analysts said would ease some near-term pressure, while warning

the company still needed to raise money by year-end.

Most analysts expect Boeing ( BA ) to raise up to $15 billion

through a share issue. But the perception of major airlines to

Boeing's ( BA ) financial risk remains a sensitive topic as many have

billions of dollars of deposits sitting with the planemaker - an

exposure some already want to limit because of delays, industry

sources say.

Boeing ( BA ) declined to comment on Clark's remarks.

Ratings agency S&P has warned Boeing ( BA ) risks losing its prized

investment-grade credit rating.