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Sun, Jan 11, 2009 - Page 10 News List

Boeing announces plan to shed around 4,500 jobs

OVERHEAD The news came a day after Boeing reported a 15 percent decline in passenger jet deliveries for last year, when it faced an eight-week strike by union workers


US aerospace giant Boeing said on Friday it would cut about 4,500 jobs beginning next month amid a weakening global economy.

“We are taking prudent actions to make sure Boeing remains well-positioned in today’s difficult economic environment,” said Scott Carson, chief executive of Boeing’s Seattle-based Commercial Airplanes business unit.

Employment at Commercial Airplanes was “expected to decline by approximately 4,500 positions in 2009 as part of an effort to ensure competitiveness and control costs in the face of a weakening global economy,” the company said in a statement.

The job cuts will bring the unit’s workforce to about 63,500, similar to the level it was at the start of last year, the company said.

“We regret the disruption to those affected by this decision,” Carson said, adding that the move would enable it to adapt to market uncertainties, meet customer commitments, continue investments and protect competitiveness.

Boeing also said the Commercial Airplanes unit had begun a program to reduce overhead costs and discretionary spending.

“Although normal attrition and a reduction in contract labor will account for some of the job reductions, layoffs of Boeing employees also are necessary,” the statement said.

Many of the job cuts will be in overhead functions and other areas not directly associated with airplane production.

Most of the reductions are expected to occur in Washington state in the second quarter of the year, with affected employees to receive 60-day notices beginning late next month, Boeing said. Laid-off employees would receive benefits and “career-transition” services, Boeing said.

“This is likely just the start of it, not just at Boeing but throughout the industry,” said Richard Aboulafia, an aviation industry analyst with the Virginia-based Teal Group.

“We’re heading into a down cycle, and how long it lasts really depends on the broader economy. But looking at the [air] traffic numbers ... it will be a bit worse than usual,” Aboulafia said.

The news of job cuts comes a day after Boeing reported a 15 percent decline in passenger jet deliveries for last year, when it faced an eight-week strike by union workers and shrinking airline demand.

The lower deliveries ensured Boeing’s archrival, Europe’s Airbus, retained its rank as the world’s top plane maker.

Orders for Boeing planes, meanwhile, plunged by more than half last year, following three straight years of exceptionally strong bookings, a reminder that carriers have been scaling back spending since the summer to cope with fewer air travelers.

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