Boeing Cuts Production of 747 and 737 Jets : Aerospace: The move is likely to cost more jobs among the parts suppliers in Southern California.
Boeing Co. on Wednesday again slashed production rates for its 737 and 747 jetliners because of slumping sales, delivering another blow to Southern California’s battered aerospace industry, which provides many of the jets’ parts.
About 320 suppliers in California build components for the 747 jumbo jet alone, including Northrop Corp., which produces 747 fuselage parts in Hawthorne. Other suppliers include Allied Signal Aerospace Co. in Torrance, Rohr in Chula Vista in San Diego County and Whittaker Corp.’s controls division in North Hollywood.
Boeing, which already had planned to cut 747 output to three planes a month early next year from a peak of 5 1/2 in 1989, said it will further slow production to two jetliners a month in January, 1995. Assembly of the 737 narrow-body jet will drop to 8 1/2 planes a month in November, 1994, from 10 currently.
Seattle-based Boeing predicted that the new cutbacks will eliminate another 2,000 to 3,000 jobs from its work force, which is currently 118,500. Those cuts would be in addition to the 28,000 jobs Boeing is already eliminating by mid-1994 under a plan announced in February. Most of the cuts are occurring in the Seattle area. Boeing builds the 737 in Renton and the 747 in Everett.
But the ripple effects of Boeing’s actions are being felt in California.
“It’s going to hit us pretty tough,” said Robert Bishop, sales manager at Valley Todeco, a Sylmar maker of aircraft fasteners that counts Boeing among its major customers. Valley Todeco’s employment has already dropped to 300 from 350 two years ago, partly because of previous Boeing cutbacks, he said.
Northrop Chairman Kent Kresa, meanwhile, has predicted that his company’s sales will drop 15% next year partly because of fewer 747 fuselage deliveries, which Northrop recently cut to three a month from five.
Northrop does not yet know if more job cuts will be needed in Hawthorne, said spokesman Terry Clawson. But he noted that Northrop has already slashed its Hawthorne work force by 1,300 positions to 1,850, in tandem with the cut in deliveries.
But at Whittaker’s controls division, which makes pneumatic valves and counts Boeing as its largest customer, “we do not see any further impact” from Boeing’s announcement, said Ronald Wittman, Whittaker’s controller. But he also noted that the division’s work force is down nearly 40% to 160 people due to the slump.
Boeing and its two rivals--McDonnell Douglas Corp.’s jetliner unit in Long Beach and the European consortium Airbus Industrie--are suffering because the world’s airlines have incurred huge losses, leaving them unable to afford new aircraft.
Indeed, Airbus Chairman Jean Pierson said earlier this week that Airbus has had 20 more cancellations than orders so far this year.
The industry expects conditions to improve by the decade’s end. But in the meantime, Boeing said, “the continuing inability of many airlines to purchase new equipment” forced the latest cuts.
