Boeing Says It Expects to Cut 7,000 Jobs : Aerospace: The reduction is greater than anticipated. Declining demand for jetliners is blamed.

Boeing Co. said Thursday that it expects to cut 7,000 jobs this year, or 6% of its work force, as it trims production of its 737 and 767 jetliners in a response to declining demand from the airline industry.

“These job reductions are higher than we anticipated just a few weeks ago,” Chairman and Chief Executive Frank Shrontz said in a statement announcing the cuts.

“Since the beginning of the year, several customers came to us asking to postpone airplane deliveries because of the continued softness of the airline industry,” he said.

Although Shrontz did not mention them by name, USAir Group Inc., Continental Airlines Inc. and Air France have all postponed or canceled orders for Boeing planes in recent days.

The job cuts will cause more pain in Washington’s Puget Sound region, where the aerospace giant employs the vast majority of its 117,000 workers.

However, industry analysts said they think the announcement indicates that the company is at or near the bottom of a long downturn that began with the 1991 Gulf War.

Since the airline industry went into a tailspin worldwide that year, Boeing has repeatedly cut production rates, slashing its job roster from a peak of 166,000 at the end of 1989.

But many airlines have begun to report strong earnings, and last year airlines worldwide posted their first overall industry profit, albeit a slim one, since 1989, analysts said.

“I think the cycle’s bottoming out, and I think they think the cycle’s bottoming out,” said analyst Bill Whitlow of Pacific Crest Securities.

Analysts said they were heartened that Boeing also announced plans to increase, from two a month to three, production of its profitable 747 jumbo jet in the second half of 1996.

Boeing said production of the narrow-body 737, its most popular plane, will drop to seven per month from the current 8.5, beginning in November.

Production of wide-body 767 jetliners will rise to four a month in April from three currently, but will drop back to 3.5 a month in December.

Boeing is making no changes to the four-a-month production rate for the 757 and it has not announced a rate for the new 777, which is scheduled for initial commercial delivery to United Airlines in May.

Analysts cautioned that Boeing earnings and revenue are expected to remain at cyclically depressed levels for the next two years before any substantial upturn is seen.

Barring an unexpected downturn in the world economy or other unforeseen event, analysts said, the worst should be behind the aircraft maker.

The company said 6,500 of the job cuts this year will involve Washington state facilities; 800 will be cut at its helicopters unit in Philadelphia and 500 at its Wichita, Kan., site.

The company said it plans to add 800 employees at other locations. Many of those jobs are associated with the National Aeronautics and Space Administration space station project and with the recent acquisition of Litton Precision Gear of Chicago.