Boeing Says Bush Cuts Will Affect 2,500 Jobs : Aerospace: Four of its programs are among those hit by the President's plan to trim nuclear weapons.

From Reuters

Boeing Co. said Sunday that it expects to lay off or reassign at least 2,500 employees due to plans by President Bush to cut the nation's nuclear arsenal, including the cancellation of four Boeing programs.

Boeing Defense & Space Group spokesman Pete Dakan said the program cuts affect less than 5% of the division's projected sales, however, and were not expected to be a major setback in the unit's bid to return to profitability in 1992.

"We think we will be moving in the right direction," Dakon said.

The unit had losses of more than $400 million in 1989 and 1990. Boeing officials had aimed to pare the losses this year and position the unit to reach profitability by the end of the year.

The four programs being slashed include the money-losing Short Range Attack Missile II, a related SRAM-T program and two intercontinental ballistic missile projects.

The ICBM projects involved building locomotives and railway cars to move MX missiles and a mobile launcher for the Midgetman missile.

Some Wall Street analysts have said the cuts may actually help Boeing by cutting some unprofitable operations in the unit, which has been boosted this year as part of a group that has won multi-year, multibillion-dollar contracts to build a new attack fighter and light attack helicopters.

Dakan said the company received a stop work order Thursday on its $3.4-billion SRAM II program. The Air Force had already been considering alternatives to the 1987 contract to build 1,633 air-to-surface, nuclear-tipped missiles in 1993. Boeing was at least a year behind schedule.

"It was a troubled program," Dakan said.

Air Force officials last year had demanded Boeing fix problems with the rocket engine of the missile, which was designed to be launched from B-1 or B-2 bombers.

The spokesman said the company is awaiting similar orders that are expected to detail how each program will be phased out.

Dakan said the Seattle-based aircraft maker determined last week that it would need to cut about 2,500 jobs as a result of the canceled programs.

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