Boeing Says It Will Slash More Jobs
Boeing Co. said Thursday that it would cut 4,000 to 5,000 jobs from its commercial aircraft business on top of nearly 34,000 jobs it has already slashed.
The bulk of the cuts will be in the Puget Sound area, where most of Boeing’s commercial aircraft are assembled. A spokesman said the reductions wouldn’t affect operations in Long Beach, where the company builds its single-aisle 717 jetliner. The workforce there has already been reduced by one-third and it currently rolls out only one aircraft a month. There are 1,800 employees in the 717 program.
The job-cut announcement was the clearest signal yet that Boeing believes the air travel slump is unlikely to recover anytime soon, and came as the company worked to resolve potential problems for its defense operations, which have been among the few bright spots in an otherwise dismal year for the world’s largest aerospace firm.
Hoping to end a federal probe, Boeing is reportedly discussing with the Air Force the idea of transferring to Lockheed Martin Co. some rocket contracts that Boeing won to launch government satellites. That could be a way to resolve allegations that Boeing stole proprietary documents from Lockheed and then used them to beat out its rival for the multibillion-dollar rocket contract.
Two days ago, Boeing said it was taking an $835-million pretax charge to cover the cost of getting out of building the rockets, known as evolved expendable launch vehicles, for commercial customers.
The potential Lockheed settlement, first reported Thursday by the Wall Street Journal, could bolster Boeing’s controversial $16-billion deal to lease 100 767 jetliners to the Air Force for use as aerial refueling tankers. A leading congressional opponent of the lease deal, Sen. John McCain (R-Ariz), has been pushing the Pentagon to defer the deal until the Air Force completes its probe of the Boeing-Lockheed rocket matter.
A Pentagon source said the Air Force expected to complete its probe this month and noted that the Pentagon could suspend Boeing from certain businesses for a period of time or require the aerospace giant to transfer some satellite rocket launches to Lockheed.
A Boeing spokesman declined to comment.
Boeing faces numerous legal headaches.
In a Los Angeles County Superior Court case that is expected to go to trial next month, Krishnan Raghavan, a former executive at Boeing’s satellite-making business in El Segundo, alleged that he was laid off in retaliation for blowing the whistle on another Boeing executive, Dean Farmer.
Farmer, who was hired away from Lockheed by Boeing, allegedly had 8,800 pages of documents labeled “Lockheed Martin proprietary,” according to court filings. Some documents concerned commercial satellite work that Boeing won in competition against Lockheed.
Last month in the rocket case, two former Boeing employees, Kenneth Branch, 64, and William Erskine, 43, were charged by the U.S. attorney’s office with stealing Lockheed trade secrets.
Boeing said Thursday that it hired former Sen. Warren B. Rudman to lead an independent review of the company’s policies and procedures regarding ethics and the handling of competitive information.
Headquartered in Chicago, Boeing is the largest private employer in California, with 35,000 employees.
The company expects to have about 55,000 commercial aircraft workers on its payroll by year’s end, down from 93,000 just before the Sept. 11 terrorist attacks.
“This is an unprecedented and very difficult time for all of us in the commercial aviation business,” said Alan Mulally, president of Boeing’s Commercial Airplanes business.
“Many of our airline customers continue to face significant challenges as they struggle to recover their financial health and regain the ability to order new airplanes.”
Boeing shares fell 22 cents to $33.17 on Thursday on the New York Stock Exchange.
