Boeing Co. will cut “several hundred” jobs at its El Segundo-based satellite manufacturing division by year’s end because of declining government orders and lagging commercial sales in the cyclical business.


The company employs about 16,000 workers in California and, in 2013, had about 5,500 employees working on satellites, largely in El Segundo.


“We’ve just seen a continual decline in government satellite spending,” said company spokeswoman Linda Taira. “And even though we have had some new commercial orders in that time, it’s not sufficient to offset the government decline, so it does have an impact on our business.”

A decline in government spending is a good thing, necessary and proper for the long-term public welfare of the state. The cuts need to happen, and they will be painful in the short run, but an economic revitalization in this country has to focus on getting people into robust private sector trade and investment.

In a statement, Boeing said “workforce reductions have been necessary to remain competitive for ongoing and future business.


“The total number of employees likely to be affected is unknown as the company makes ongoing assessments of business needs,” it said. “However, based on current projections, as many as several hundred employees could be affected through the end of the year. “


Barbara Voss, economic development manager for the city of El Segundo, said the company did not give the city a heads-up in advance of the layoff announcement, but said she plans to talk to Boeing officials.

“Certainly, it’s not good news,” she said. “We want to avoid any layoffs if we can and we will be reaching out to the company and offering our support on a local level.”


While commendable that this and every other business wants to avoid layoffs, let us also hold the anti-business climate in California accountable for not allowing small and large firms to expand and hold onto their profit margins. How about making it easier to hire people and keep them on the payroll, without dependence on federal largesse?

Boeing’s announcement represents a sharp decline in the satellite business in just two years.
In 2013, Boeing’s satellite business was booming with a backlog of more than 30 spacecraft on order, prompting an expansion of manufacturing space after more than a decade of shrinking operations.


But now that’s changed rapidly because of the reduction in defense spending coupled with problems in the private sector, such as the Congressional decision not to reauthorize the U.S. Export-Import Bank.


The article makes it clear how unclear the author understands trade and economics. There cannot be problems in the private sector if government funding has been buoying those businesses in the first place. The Export-Import Bank was government cronyism at its most basic. The  closure of this government subsidized loan institution should not other anyone.

The 80-year-old institution’s charter lapsed June 30 and a small group of Republicans who see the bank as a form of corporate welfare are holding up its reauthorization despite its otherwise widespread bipartisan support, observers say.


Who are these observers? Why does the columnist refuse to name names? "Small group of Republicans"? Apparently,  The Daily Breeze forgot that celebrity Democrats in the US Senate also wanted to kill the Ex-Im bank, including Presidential candidate Bernie Sanders and Elizabeth Warren of Massachusetts.

Boeing customers are the largest users of the bank by dollar volume — last year $765 million in Boeing’s export sales were supported by $431 million in EXIM loans or loan guarantees, said JoAnne Stewart, director of industry cluster strategy at the Los Angeles County Economic Development Corp.

They should not be living off government money.

But commercial satellite provider ABS last month canceled an order with Boeing, primarily because it couldn’t get financing through EXIM.


If they could not get financing through private institutions, that means their investments are not worthwhile in the first place. No corporate or government interest  should be putting our money at risk, either. These Big Government loans are a form of unconscionable corporate welfare. The CEOs and Boards of directors need to take risks with their own money or gaining capital at a slower pace to make larger investments.

South Bay Rep. Ted Lieu, whose 33rd District includes El Segundo, said Tuesday he found the layoff announcement “disappointing and frustrating” and put the value of the lost contract at $130 million.
“Today’s announcement of layoffs at Boeing in El Segundo underscores how House Republicans’ decision to shut down the Export-Import Bank is a complete and utter abrogation of their responsibility to act on behalf of the American people,” he said in a statement. “The shutdown of the bank is having devastating impacts on California’s 33rd District, as well as communities from coast to coast.”

Lieu borrows from the Waxman playbook "It's the Republicans' fault"

I absolutely despise Ted Lieu for playing the "Waxman GOP Hate" card. Where was Ted Lieu when all the major banks were failing,  and threatened to take the entire financial sector down with them unless Congress handed over one trillion dollars in bailout money? Henry Waxman did not even know that Crystler went bankrupt, yet he supported the GM Bailout, and the company still went bust, taking billions down with it.

In a July letter to Lieu, Fred P. Hochberg, EXIM chairman and president, wrote that last year the bank supported 164,000 American jobs and generated $675 million in profit for taxpayers.
Lieu’s district benefits substantially; Hochberg noted that in May alone EXIM supported $35.7 million in exports from the district that stretches from the Palos Verdes Peninsula to Calabasas and Beverly Hills.


Another big beneficiary was Hawthorne-based Space X; it received $72 million in financial assistance last year that supported $82 million in exports, Stewart said.

Elon Musk is anti-social, some of his subordinates claim. He should be anti-corporate handouts, too. He even claimed that he does not need Uncle Sam's money.

A total of 10 percent of California’s exports derived from EXIM financing came from the 33rd District. And much of that benefited small businesses, which represent the most EXIM transactions.
Still, opponents like House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican whose panel would play a key role in any reauthorization of EXIM, don’t see it that way.
“If you’re a politically connected bank or company that benefits from EXIM, no doubt you would like it to continue,” he wrote in a June 2014 press release. “After all, it’s a sweetheart deal for you. Taxpayers shoulder the risk and you get the reward.

Congressman Hensarling is a champion. Ted Lieu is a chump. By the way, the Daily Breeze did not bother to ask Autumn Burke or David Hadley about the Ex-Im bank and the influence of corporate welfare in the South Bay. Why not?

“But if you work at a small business or other American company competing in the global marketplace, it’s unfair,” he added. “EXIM effectively taxes you while subsidizing your foreign competitors.”

Exactly. It;s not fair. Small businesses cannot afford lobbyists, nor do they have Big Government federal connections.

EXIM backers said statements like that are just plain wrong.


Of course they think it's wrong. They want the money!

The niche bank steps in when private sector lenders can’t or won’t provide financing. It also helps protect manufacturing jobs that are fleeing California, LAEDC officials said.
EXIM also levels the playing field that allows companies like Boeing to compete globally.


Why don't those private lenders get involved? They assess the risk of loaning the money, and they calculate that it's not worth it.

Boeing spokesman Tim Neale said companies like ABS are now turning to EXIM counterparts that provide similar financial help for aerospace industries in nations like Germany, France and the United Kingdom — important Boeing export markets.


“They are understandably looking at other satellite providers outside the United States,” he said. “We’ve been put in a very unfortunate situation by the lack of action on EXIM. … It is very much a political issue.”


My answer to that? Let those countries shoulder the costs and the failures. Businesses need to thrive in a free market. If they have to depend on government money to survive, then these companies need to reassess their business model or find another means of raising revenue.

Final Reflection

The Substantial bias in this article was telling. Nick Green spoke to Ted Lieu, but never bothered to contact David Hadley or Autumn Burke, or even Ben Allen. The Daily Breeze went out of its way to promote Henry Waxman in its pages, even though he remained a West Los Angeles fixture following his election in 2012 to the newly drawn 33rd Congressional District.

For Lieu to blast Republicans for ending corporate cronyism was very sad and petty. He has not even taken a strong stance against the Iran deal which President Obama and John Kerry have cobbled together, in spite of insistent refusal to submit to Congressional concerns about any negotiations with the rogue terrorist state.

Furthermore, Green talks about "a small group of Republicans", when their lead to end the government's picking and choosing business winners and losers includes prominent Democrats in the House and the US Senate.

The Republican Party members in Washington who have ended the crony Ex-Im bank are champions for taxpayers and this country's long-term fiscal health. As for major South Bay industries like Boeing, they need to invest their wealth and resources more toward private sector expansion. In a country beset with welfarism, let's focus on ending corporate welfare, even if it causes short-term pain for South Bay aerospace companies.