Boeing to cut 4,500 jobs as airline demand falls

[January 10, 2009]  PITTSBURGH (AP) -- Boeing Co., the world's second-largest airplane maker, plans to cut about 3 percent of its work force as a weakening global economy lowers demand for jetliners.

The Chicago-based company on Friday said it expects to cut about 4,500 positions from its passenger jet business, which has factories in the Seattle area. Many of the cuts will be in areas not directly associated with aircraft production.

The news comes a day after Boeing reported a 15 percent decline in passenger jet deliveries for 2008, when it faced an eight-week strike by union workers and shrinking airline demand. The lower deliveries ensured Boeing's archrival, Europe's Airbus, retained its rank as the world's top plane maker.

Orders for Boeing planes, meanwhile, plunged by more than half last year, following three straight years of exceptionally strong bookings, a reminder that carriers have been scaling back spending since the summer to cope with fewer air travelers.

Most of the job cuts announced Friday are expected to occur in Washington state between April and June, the company said. Boeing says employees will receive 60-day notices starting in late February.

"This is likely just the start of it, not just at Boeing but throughout the industry," said Richard Aboulafia, an aviation industry analyst with the Virginia-based Teal Group.

"We're heading into a down cycle, and how long it lasts really depends on the broader economy. But looking at the (air) traffic numbers ... it will be a bit worse than usual."

Boeing said the cuts will enable it to continue focusing on development programs, airplane deliveries, productivity improvements and quality, as well as customer support.

"We have made significant strides in recent years to achieve greater efficiency and productivity, but we still face challenges that we must address," Scott Carson, president and chief executive of Boeing's commercial airplanes division, said in a statement.

Boeing has attributed jetliner delivery delays to the strike by unionized workers -- including electricians, painters and mechanics -- and other production glitches.

The work stoppage by 27,000 workers forced the company to shut its commercial aircraft plants from early September to early November.

The affected planes include the world's top-selling 737 and its next-generation 787, built for fuel efficiency with carbon composite parts.

The company said this year's job cuts will eliminate roughly the number of positions added to its commercial aircraft operation in 2008, lowering the total number to 63,500. Boeing employed a total of 162,191 people as of Dec. 31.

In November, Boeing, also a major defense contractor, announced plans to lay off 800 of about 3,000 workers at a facility in Wichita, Kan., due to the delay of a U.S. Air Force tanker replacement program and the end of other work projects.

Boeing shares fell 34 cents to $44.45 on Friday.

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Boeing Co.: http://www.boeing.com/

[Associated Press; By DANIEL LOVERING]

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