(Newswire.net — August 25, 2015) Seattle, WA — After losing a major contract with Asia Broadcast Satellite (ABS) company last month, Boeing decided to cut losses by cutting jobs, Reuters reported. Citing the internal memo, the loss of ABS contract was blamed indirectly to the uncertainty of Boeing’s major creditor, US Export-Import Bank (EXIM).
Reportedly, the decline in US military spending and delays in the number of satellite orders, also contributed to a decision Boeing made to cut “several hundred” jobs by early 2016.
Boeing representative Tim Neale, confirmed that the staff reductions would take place, however the total number of layoffs will be known within the next few months.
According to Neale, the cuts were “necessary to remain competitive for ongoing and future business.”
“While this [planned job cuts] is not solely being caused by the expiration of EXIM Bank, this is a factor for the customers who have decided to maybe hit the pause button or look somewhere else,” Neale told the Wall Street Journal.
US government officials said they are concerned about the shutting down of EXIM Bank, because Boeing is not the only mega company the bank credited. Also, many smaller companies depended on credit ratings provided by EXIM bank, are now experiencing hard times.
EXIM bank was shut down after US Congress supported conservative Republicans, who voted against financing, claiming the bank provides “corporate welfare” for big companies.
“It is irresponsible to think that we can boost job growth while tying one hand behind the backs of exporters and manufacturers. This dangerous practice of putting politics before policy will result in job losses, for which members of Congress will be held accountable,” the advocacy group, Exporters for Ex-Im Coalition, stated a day before the bank was closed.
Losing the bank, EXIM supporters stressed US lost competitiveness against foreign companies that rely on their banks support in executing major contracts.
The Boeing representative mentioned that uncertainty of EXIM’s future made many of Boeing’s international customers “very nervous,” as they relied on funding from the bank.
“In the absence of EXIM, 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,” Neale concluded, as cited by Reuters.