CHRIS STETKIEWICZ, Seattle | Wednesday
BOEING said on Tuesday it would lay off between 20 000 and 30 000 workers in its commercial jet unit by the end of 2002 in anticipation of a sharp drop in orders from a troubled airline industry rocked by last week’s attacks on New York and Washington.
Boeing, the world’s biggest jet maker, cut its forecasts for aircraft deliveries and said the downturn could run into 2003 as US airlines reduce capacity after hijacked passenger planes slammed into the World Trade Center in New York and the Pentagon near Washington on Sept. 11.
The planned job cuts would cover all jet models and be spread across Boeing’s various commercial jet sites, where 96 600 people design and build airplanes, including many airframe components, as well as a business unit that provides support services.
”We profoundly regret that these actions will impact the lives of so many of our highly valued employees,” Alan Mulally, president of Boeing’s jet unit said in a statement.
”However it is critical that we take these necessary steps now to size the … business to support the difficult and uncertain environment faced by our airline customers.”
In a hastily arranged news conference at the unit’s headquarters south of Seattle, Mulally said Boeing could not yet say what impact the restructuring would have on its earnings.
Jet deliveries might only total 500 this year, down from an earlier forecast of 538, the company said.
Boeing also slashed its projection for 2002 deliveries to the ”low 400s compared to the 510 to 520 previously forecast” and said deliveries would likely fall even further in 2003, without providing a specific estimate.
The sharp reduction in its delivery forecast was in line with the 20% capacity reduction by US carriers and its own view of global air traffic, Boeing said.
The only good news was that while Boeing customers have been delaying scheduled deliveries, they have not yet taken the more drastic step of canceling planned purchases, Mulally said.
The Bush administration plans next week to propose a government bailout of the US airline industry, which was already suffering from a soft economy before the nation’s fleet was grounded for two days and costly new security steps ordered in the wake of the attacks.
The attacks, which the White House has blamed on an organisation headed by Saudi-born exile Osama bin Laden, left nearly 6 000 people missing or dead.
In the days since, commercial flights have been running on reduced schedules with many travelers afraid to fly. The industry has requested a $24-billion government bailout.
”We are very concerned, like the airlines, about their financial viability,” Mulally said late on Tuesday.
US Rep. Jim McDermott, who represents Washington state, where Boeing employs 80 000 of its 199 000 workers, said the announced job cuts underlined the seriousness of the threat to the airline industry after last week’s attacks.
”We’ve got to start talking to people quickly about the fact that if we stop traveling because we are afraid, the whole (air travel system) is going to come down and whoever did this will have won,” he said.
The union that represents Boeing machinists called on the US government to take steps to protect jobs in the industry and urged Americans to keep flying.
”Aerospace is the industrial future of America. We would hope that some of the $24-billion government airline bailout would be earmarked to preserve American aerospace jobs,” said Mark Blondin, president of the Seattle chapter of Boeing’s machinists union.
Boeing said it would press ahead with the development of strategic, next-generation aircraft, such as the high-speed sonic cruiser jet, even as it considered delaying some upgrades to current aircraft models.
”Long-range developments … like the sonic cruiser, we absolutely keep going on,” Mulally said.
The company also said it was working closely with the US government to improve jet safety and that an internal initiative was already underway to solicit and review ideas submitted by Boeing engineers.
”After 31 years designing airplanes … I never in my wildest dreams thought a commercial jet would be used as a weapon,” Mulally said. – Reuters