Boeing Annual Employee Bonuses Cancelled Amid $10bn 737 MAX Crunch

Many of Boeing’s workers are finding little reason to celebrate over the festive season as their annual bonuses have been canceled. White collar workers in the US failed to receive their annual bonus, and now it seems none of the company’s employees in the UK should expect any bonus payment in February either. This comes as Boeing loses its CEO and takes an estimated $10bn hit over the grounding of the 737 MAX.

Getty images boeing 737 MAx groundings
The grounding of the 737 MAX has hit Boeing’s Christmas bonuses. Photo: Getty Images

No Christmas bonus at Boeing

It’s apparently the most wonderful time of the year, but perhaps not so much for workers at aerospace giant Boeing. The Telegraph reports that Boeing’s staff in the UK had some bad news today, as the planemaker chose not to dish out any employee bonuses to its staff in Britain.

In the USA, the company’s white collar workers are also not expecting any bonus payments. These workers had been warned late last year that this would be the case. However, it now seems that none of the company’s UK workers will receive their bonus payments this year.

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Boeing Sheffield
None of Boeing’s 2,500 UK workers will get a bonus. Photo: Boeing

The UK worker’s bonuses are usually made in February and, in the past, have ranged from £1,000 ($1,300) to £10,000 ($13,000) depending on seniority and experience. One person told the Telegraph that the company was in ‘austerity measures’ and that morale at the UK arm was painfully low. A Boeing spokesperson told the publication,

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“We value the hard work and dedication of our UK employees at this challenging time.”

Last year, Boeing’s bonuses paid out worldwide totaled some $900m. City AM reports that the company has so far taken a hit of almost $10bn as a result of the 737 MAX grounding, a figure which could continue to inflate as the grounding drags on into 2020.

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Most recently, the company has said that it will halt production of the 737 MAX from the start of this new year. Regulators have warned that it’s likely to take until February or March to approve the plane to fly, but airlines are being cautious, some removing the type from schedules well into the second quarter.

Someone could still get a bonus

Despite tight times at Boeing, there still seems to be some cash floating around for the right people. Denis Muilenberg was ousted from his position as Boeing CEO just before Christmas, on December 23rd.

CNN Business reports that the ex-CEO could be in line for a sizeable golden parachute. This is hardly surprising given the way the company has fitted him up to take the majority of the blame for the 737 MAX scandal. In many other cases, the CEO would have walked from his position immediately after the second crash, but it seems Boeing was holding on to dear Dennis, in the hope that with his departure he would take most of the blame with him too.

Dennis Muilenburg Boeing
Dennis Muilenburg could get a golden parachute of up to $60m. Photo: Getty Images

As such, the bye bye bonus for Muilenberg is thought to be approaching the $60m mark, made up of a $30m benefit plan, severance pay of $7m and various stock and pension plan benefits of some £31m.

The final package Muilenberg gets will be negotiated behind closed doors. A lot will depend on how his departure is labeled; even now there is still conflicting information coming out of Seattle as to whether he resigned, was fired, laid off or simply retired.

Muilenberg’s successor, David Calhoun, will take over as CEO on January 13th, 2020.

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Frank

Don’t worry, Boeing employees – Dennis is going to be taken care of, so you don’t have to fret. Also, the last quarter the shareholders received their usual dividend and the stock is holding up under the fiasco, so the 1%ers are going to be ok. I’m sure the only ones who will get it in the neck will be you folks (the little guys) and all of the workers in the supply chain who get squeezed for more and more production each day. Oh – happy holidays and hope you didn’t talk about our ‘problems’ around the dinner table.… Read more »

neutral

The one-percenter talk just shows that you have an agenda and no real analysis or intelligence.

Paul Proctor

Realize that Boeing employees are one of the biggest shareholding groups of Boeing stock, mostly in their 401K retirement funds. So one-time loss of a performance-related bonus is of less consequence than stock price.

M. B.

Boeing employees never get a “Christmas” bonus. The company operates on an incentive plan that pays out to covered employees if it reaches all of its financial goals for the year. Just writing “fluff” pieces to pile on during the 737 MAX grounding is both misleading and irresponsible.

Paul Proctor

MB is correct. And employees understand it is performance-based.

Armand2REP

Nice to see the comment section returned back to normal.

TheDude

This article is incorrect. It is not a Christmas bonus. It is an employee incentive for each major group if they meet certain goals. It is paid out in February typically. Additionally they are not “usual bonuses.” The amount differs if goals are not met. My god media these days just sucks. Do better with your constant Boeing bashing. This was announced months ago so it is not news anymore anyways.

TheDude

haha down votes for clearing up blatantly incorrect facts. No wonder it happens on a daily basis here. It is encouraged apparently.

JFP

Boeing should take their production (and jobs) to a country with a government that wants them to be successful.

Antz

A clean sheet design I’m guessing would have been less than $10b? Wouldn’t have killed nor caused so much distress to employees and contractors and Boeing would have had a much better competitor to go against the A320. Hindsight, but foreseeable based on information supplied to the FAA and congress. Surely more of management needs to be booted?

Paul Proctor

Easy to say when it is not your money…recall Boeing sold, what, 5000 MAXs.

TheDude

You forget something, Paul, this site is filled with aircraft manufacturing CEOs with tons of experience dealing with board members and shareholders. Heck the experience alone is this forum could build the best, cheapest, and most efficient plane ever! /sarcasm.

Paul Proctor

Let’s apply some journalistic standards here. The line ‘Boeing was holding on to dear Dennis…’ is pure opinion, sarcastic and shallow. Citation please from a reputable source.

Erin

Hi Joanna, we never do get Christmas Bonuses. Those are yearly bonuses and they are distributed around March.