Boeing may cut more local jobs - But cautious executives offer no specifics
LE BOURGET, France -- The Boeing Co. is considering more job cuts at its commercial airplane operations in the Puget Sound region, the Seattle Post-Intelligencer has learned.
It is not clear how deep the next round of cuts will have to go in
order to meet anticipated production declines, but they would be in
addition to the 5,000 employees already cut this year and about 30,000
positions cut in the 15 months before that.
Sources said Boeing could make an official announcement soon. While they did not give specific numbers, one source commented that the company likely would not make a formal announcement if the cuts involved only a few employees.
Boeing employment in the region "could go lower," Alan Mulally, Boeing Commercial Airplanes president and chief executive, acknowledged in an interview yesterday at the Paris Air Show when he was asked if the 5,000 job cuts this year would be enough.
But Mulally was cautious in picking his words. He did not say more job cuts were coming.
Less than three weeks ago, Boeing Chief Executive Phil Condit said that the company was "just shy" of the 35,000 cuts it has said it expected since the Sept. 11, 2001, terrorist attacks. "There will be more (layoffs) ahead but not many," Condit said during a May 28 news conference in Tokyo.
Since December 2001, Boeing has trimmed slightly more than 33,000 jobs from its payroll. It plans to hand out another round of pink slips tomorrow, while also issuing a separate set of 60-day layoff warnings, in a routine it has followed for more than two years.
Further reductions depend on the current industry downturn and Boeing's anticipated jetliner production, Mulally said.
"We will keep trying to match the resources we need to the production," Mulally said. "Clearly, if it doesn't get better, then we could come down some more."
Boeing delivered 527 jetliners in 2001, but that fell to 381 in 2002. This year, Boeing is forecasting that it will deliver 280 planes. The company has only given a range of deliveries for 2004 -- from 275 to 300 planes. But a number of industry analysts believe that range will be further refined downward toward the end of this year as a result of airlines asking both Boeing and Airbus to defer delivery of more planes they have ordered.
Airbus has said it will deliver about 300 planes in 2003 and again in 2004. But in an interview, a senior Airbus executive said 2004 remains uncertain.
"We are watching 2004 very carefully," John Leahy, Airbus commercial boss, said in an interview. "It is hard to say if deliveries will be equal to or down a little from this year."
Boeing is expected to revise its 2004 delivery target later this year.
In yesterday's interview, Mulally noted that the low end of next year's delivery forecast of 275 planes is less than the 280 to be delivered this year.
"If travel does not come back, and airlines don't get profitable, and if this market stays depressed, then there is a definite possibility we could adjust employment downward some more," he said. "But it is consistent with that range of outcomes in 2004 and what happens in 2005."
Last November, Boeing said it would cut 5,000 more jobs from its commercial aircraft work force during 2003.
That came on top of the more than 30,000 workers companywide whose jobs were targeted for elimination as a result of the airline industry's worst-ever downturn, after the terror attacks.
But since the second round of cuts began early this year, the airline industry has been battered first by the Iraq war and more recently by the SARS epidemic.
An industry recovery is not expected until at least 2005.
P-I reporter Paul Nyhan, in Seattle, contributed to this report. P-I aerospace reporter James Wallace can be reached at 206-448-8040 or email@example.com
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