Boeing plans to cut 10,000 jobs

Boeing plans to cut 10,000 jobs »Play Video
SEATTLE -- A Boeing Co. plan to increase job cuts to about 6 percent of its work force this year drew a skeptical response from a key union leader Wednesday, even though production workers appear likely to be spared.

In a conference call Wednesday after Boeing reported a $56 million quarterly loss, chief executive W. James McNerney announced that another 5,500 jobs would be eliminated iin addition to 4,500 job cuts announced earlier this month.

A Boeing spokesman in Chicago, John Dern, said the cuts would be made through attrition and layoffs.

"We wouldn't expect to see, relatively speaking, the kind of reductions in production and engineering as we would in overhead functions," he added.

Mark Blondin, aerospace coordinator for the International Association of Machinists and Aerospace Workers, which represents about 27,000 Boeing production workers, noted that Boeing still has a record backlog of 3,700 planes on order.

"If those jobs were necessary then, why are they superfluous now?" Blondin said. "It's disappointing to this community when anybody loses their job."

At the same time, he added: "It's obviously an indication of the economic downturn that this country is facing right now. Maybe this new (Obama) administration will be able to get things moving in the right direction again."

Tom Wroblewski, president of Machinists District Lodge 751 in Seattle, said Boeing told union officials only that "the impact will be `minimal,' but they will provide details on how our membership will be affected on Feb. 6."

Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace, a Seattle-based union representing more than 20,000 Boeing engineers and technical workers, said McNerney was sending mixed messages.

Boeing boosted dividends by 14 percent last month, "and that's saying they have more money than they know what to do with," Goforth said.

With Boeing also anticipating an increase in per-share earnings for 2009, he added, "This doesn't look like a company that needs to lay off people."

Instead, Boeing should be hiring more production and engineering workers to get planes out the door faster and "convert orders that it has on paper to cash on hand," Goforth said.

Gov. Chris Gregoire said in a news release she arranged a meeting Wednesday with Scott E. Carson, president of Boeing Commercial Airplanes, to learn more details and will continue to work with federal officials on economic recovery efforts.

"I am troubled to learn that Boeing will be laying off more workers than announced earlier this month. Aerospace, along with many other Washington industries, is being hit especially hard by the national recession," Gregoire said.

The company's 2009 financial forecast assumes stable deliveries over the next few years of commercial airplanes that are in production. Its commercial aircraft business expects to deliver between 480 and 485 airplanes this year.

Boeing delivered just 50 planes in the last three months of 2008, compared with 112 planes during the same period a year earlier.

In November, Boeing further delayed the first test flight and delivery of its much-anticipated 787 jetliner, the world's first large commercial airplane made mostly from carbon-fiber composites, blaming the strike and lingering production problems.

It also delayed deliveries of 747-8 cargo and passenger jets, partly due to the strike, and deliveries of 737s, 747s, 767s and 777s as it replaces defective fasteners used to attach wiring and other components inside the planes' fuselages.

"The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs," McNerney said in a statement.

In 2008, Boeing had about 6 commercial plane order cancellations and about 110 deferrals, McNerney said in a conference call. The deferrals represented about 3 percent of its commercial plane backlog, "which is not out of the norm."

"We do expect to see an increase in our deferrals in 2009," McNerney added. "However, the size, diversity and quality of our backlog provides greater flexibility than we've had in the past to accommodate our customers."

To date, Boeing said 58 customers had placed 895 orders for 787s, excluding a recently canceled order from one customer for planes scheduled for delivery late in the next decade.

Boeing, which ranks as the world's No. 2 airplane maker after France's Airbus SA, reported 2008 net income of $2.7 billion, or $3.71 per share, down 34 percent from 2007.

Commercial jet orders declined by half in 2008, after three consecutive years of exceptionally strong growth. Still, the aerospace company has orders for a record 3,700 planes.

"Despite this challenging environment, our backlog is holding," McNerney said.

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