Booming economy, low oil...
Tuesday, 1 December 1998
S E A T T L E (AP)
BOEING CO. will cut an additional 20,000 workers over the next two years
as the company further scales back production of several commercial jet
lines due largely to slackening demand because of the Asian economic
crisis.
The new cuts will bring the total reductions in Boeing's work force to
48,000 jobs, or a 20 percent drop from the high level of 238,000 reached
in June of this year. In July, the company announced that it would trim
28,000 jobs.
"Clearly, the economic slowdown in Asia is driving air traffic down which
impacts our customers' plans and operations," Alan Mulally, Boeing
Commercial Airplane Group president said Tuesday. "Our actions today
will match production to market demand to support our customers."
Boeing, which earlier had projected 1999 net earnings at about $2 billion,
now is forecasting next year's profits at $1.5 billion to $1.8 billion. It said
1998 profits were expected to be slightly above $1 billion, as earlier
forecast.
The size of the new job reductions came as a shock to Boeing workers.
"It came as a surprise although I knew more layoffs were coming. But I
expected less layoffs," said Daniel Smith, a fuel line plumber on 777
jetliners at Boeing's Everett assembly plant.
"It's affected everyone pretty badly. Everybody's scared they're going to
get laid off. Everybody's worried. People aren't spending money.
Personally, I'm worried I won't be able to pay for my house. I'm worried I
may get a layoff notice myself."
"We weren't anticipating any layoffs," said Bill Brock, a business
representative for Local 837 of the Machinists union in St. Louis, where
Boeing assembles fighter planes.
"Naturally if they weren't laying off anyone in St. Louis we were pleased.
But, we don't want to see anyone laid off," he said.
Boeing has not said where the layoffs will take place.
Boeing presently is rolling out 51 planes a month, said spokesman Larry
McCracken. He said that will drop to 47 at the end of next year and 38.5
planes a month by the end of 2000.
The company said it would reduce production of 747 jetliners from 3.5 to
two airplanes per month late next year, and to just one per month in early
2000 if market conditions fail to improve. It now produces five 747 jumbo
jets a month, and had earlier said it would reduce the rate to 3.5 by the
middle of next year.
Production of 757 jetliners will drop from five to four airplanes per month
and the 767 program will drop from four to 3.5 airplanes per month in
early 2000.
The 777 program, currently scheduled to be reduced from seven to five
planes per month in fourth quarter of 1999, is now projected to remain at
the lower rate in 2000. Boeing had hoped to return the production rate to
seven a month in 2000.
Boeing will increase production on its new-generation 737s as scheduled
to 24 planes per month, and it will remain at that rate until late 2000 when
it will decrease to 21 a month.
Air traffic growth in many Asian markets has plummeted as the countries
grapple with their worst currency crisis in decades. Many Asian airlines
have reported operating losses or reduced profits since the crisis began,
Boeing officials say. |
