Aerospace giant Boeing Co. said Tuesday that it plans to lay off as many as several hundred employees at its Southern California-based satellite division.
Boeing said the cuts were needed after a customer could not get financing through the Export-Import Bank and canceled an order for a pricey satellite.
At the same time, recent rocket failures have delayed the start of work on other satellite orders, the company said, and the division has suffered as the Pentagon continues to reduce spending.
Most of the affected employees work in El Segundo, where the aerospace firm operates a large satellite factory, Boeing spokeswoman Linda Taira said.
Taira said that Bermuda-based ABS, a global satellite operator, had recently canceled an order for one of Boeing’s new electric-powered satellites because of its inability to finance the purchase through the Export-Import Bank.
This summer, House Republican leaders succeeded in their quest to shut down the bank, which helps U.S. companies sell their goods overseas.
Boeing and ABS are continuing to discuss other ways to finance the satellite purchase, Taira said.
“Many of Boeing’s international customers rely on Ex-Im Bank financing to purchase commercial satellites and airplanes,” she said. “In the absence of Ex-Im, Boeing may need to serve as the lender of last resort, but there are real limits to how much of this the company can do.”
Boeing managers told employees Monday about the layoffs that will happen by year end, Taira said.
Taxpayers provide no money to the Ex-Im Bank, which is funded by the interest and fees it receives on the loans. But conservative Republican leaders, including House Majority Leader Kevin McCarthy (R-Bakersfield), have branded the federal government’s aid to the bank as corporate welfare.
The bank’s charter expired July 30 after key House leaders prevented a vote to extend it.
Boeing would not disclose how many people work in its satellite business.
The company has been cutting its workforce in California for years. At the end of July, Boeing had 16,768 employees in the Golden State — about half the number employed here a decade ago.