By Andrew Tangel and Thomas Gryta 

Boeing Co. said it would suspend airliner production in the Seattle area and General Electric Co. said it would lay off workers making jet engines for customers including the aerospace giant, as the coronavirus pandemic places a heavy drag on U.S. industry.

Many manufacturers have kept factories running even as confirmed cases of the virus have multiplied in the U.S. But more companies are closing at least some of their plants as demand plummets and some of their workers test positive for coronavirus.

Recreational-vehicle makers Winnebago Industries Inc. and Polaris Inc. said Monday that they were suspending some manufacturing operations. Harley-Davidson Inc. and U.S. car makers have also curtailed or suspended some production in recent days.

Lower vehicle production means lower demand for steel, too. Luxembourg-based ArcelorMittal SA, the world's largest steelmaker by production, said Monday that it plans to idle a furnace at its Indiana Harbor Works, in East Chicago, Ind., and another at its Dofasco mill in Hamilton, Ontario.

Boeing said it would halt production at its plant in Everett, Wash., for 14 days starting March 25. The factory produces the 787 Dreamliner and other widebody aircraft. The company said it would do a deep-cleaning of the facility during the suspension.

At least 32 Boeing employees have tested positive for the virus as of Monday, including 25 who work in the Seattle area, the company said. One Boeing worker at the Everett factory died over the weekend from suspected complications related to Covid-19, the illness caused by the virus, a person familiar with the matter said. The death was earlier reported by the Seattle Times.

Boeing is also halting production of military versions of its jetliners, including refueling tankers for the Air Force.

"This necessary step protects our employees and the communities where they work and live," said Boeing Chief Executive David Calhoun.

Boeing is leading an effort to secure at least $60 billion in government and private-sector aid for the aerospace industry, with an unspecified portion for itself.

GE Chief Executive Larry Culp said the company wasn't seeking a government bailout, but supported efforts to assist the aviation industry and the broader economy.

"What we don't know about the magnitude and duration of this pandemic still outweighs what we do know," Mr. Culp said.

Some 36,000 Boeing employees work at the Everett plant, including engineers and other white-collar employees. Boeing said workers who can't work remotely during the suspension will receive paid leave for the initial 10 working days of the suspension.

The scope of the toll that the pandemic will exact on manufacturers around the world is uncertain. Some factories in China have reopened after closing for weeks as the outbreak took off there early this year.

Boeing rival Airbus SE said Monday that it planned to restart production at facilities in France and Spain that had been idled temporarily because of local travel restrictions and factory-cleaning efforts.

But the damage in the U.S. is still mounting. GE said it would lay off about 10% of the U.S. workforce in its jet-engine business, or about 2,500 employees, one of the first major job cuts at a big American manufacturer as a result of the pandemic.

GE also said as many as half of the maintenance and repair employees in its biggest and most profitable business would also be furloughed for three months. The unit makes and maintains engines for Boeing and Airbus planes. GE said the moves would save $500 million to $1 billion.

GE had been restructuring its operations and trying to pull out of a slump caused by weak demand for its power-generation equipment and troubles in its GE Capital unit.

Before the coronavirus outbreak, GE had projected improving cash flow from its industrial operations. Even so, its aviation unit had been battling a slowdown in production caused by the grounding of the Boeing 737 MAX jet after two fatal crashes. Boeing suspended MAX production in January.

The GE Aviation unit, with 52,000 employees worldwide, previously enacted a hiring freeze, canceled merit-based raises, cut nonessential spending and made cuts to its contingent workforce.

The coronavirus pandemic has emerged as the biggest blow to the global aviation industry in decades. Commercial travel has slowed precipitously as airlines have grounded large portions of their fleets. Boeing has suspended its dividend and drawn down credit lines, but so far avoided layoffs.

Boeing and GE's CEOs will forgo their salaries this year, the companies said, while GE Aviation CEO David Joyce plans to give up half his salary.

ArcelorMittal said it is working with the United Steelworkers Union to transfer dislocated workers at the Indiana Harbor plant to other available jobs. ArcelorMittal said no jobs would be affected by the furnace shutdown in Canada.

ArecelorMittal said it hasn't ruled out additional shutdowns at mills to align production with reduced demand for steel. The company said last week that it is reducing production at several European mills because of the pandemic.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Thomas Gryta at thomas.gryta@wsj.com

 

(END) Dow Jones Newswires

March 23, 2020 16:28 ET (20:28 GMT)

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