Business

<< Previous   of   Next >> (click to enlarge) Scott Carson   ADVERTISEMENT   Related Stories • Boeing plant remains shut down after possible sabotage 11/22/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Thursday, November 20, 2008 Boeing cuts defense 800 jobs, sees pending delivery backlog peaking By Michelle Dunlop Herald Writer EVERETT -- The Boeing Co. plans to cut about 800 defense positions in Kansas next year partly because of the delay of the U.S. Air Force tanker competition, the company announced Wednesday. That's about 27 percent of Boeing's work force at its defense facility in Wichita, Kan. The layoffs will affect managers and both salaried and hourly workers. "We understand the disruptions that layoffs cause in personal lives and in our community," said Scott Strode, vice president and general manager of Boeing Wichita. "However, a combination of events are limiting our business options and forcing us to reduce our current employee total." The Wichita operation, a defense facility that provides limited support for Boeing's commercial aircraft business, currently employs about 3,000 people. Work at the facility includes modifying Boeing aircraft for international customers. Among its programs are executive aircraft, refueling systems support for B-52s, and 767 international tankers. For seven years, Boeing has been trying to land a multibillion-dollar contract with the Air Force supplying aerial refueling tankers, based on the company's commercial 767 jet. The Air Force awarded the contract early this year to Northrop Grumman. But government auditors found flaws in the competition. The defense secretary halted the contest until the new administration takes over next year. In the battle with Northrop, Boeing emphasized its experienced work force -- both the commercial workers who build the 767 jet in Everett and the defense employees who install military applications in Wichita. Analyst Paul Nisbet with JSA Research didn't think that the layoffs would hurt the company's case when the tanker competition is reopened next year. "I think they are keeping what they need," Nisbet said. Separately, Scott Carson, president of Boeing Commercial Airplanes, predicted that the company's jet orders backlog likely reached its peak in 2008. Carson addressed analysts at an aerospace and defense conference Wednesday. Despite the worsening global economic crisis, Carson believes Boeing's commercial backlog is sound, with roughly 3,700 orders from customers around the world spread across its product lines. Boeing continues to assess the effect on its commercial jet line of a 57-day strike by its Machinists, which ended Nov. 3. All but fewer than 5 percent of the 27,000 Machinists have reported back to work building Boeing jets here in the Puget Sound region, Carson said. Company spokesman Tim Healy said the company expects to lose about 90 Machinists, who essentially resigned after the strike. Another 1,700 Machinists have not returned to work yet but have excused absences -- such as illness or loss of a family member. Boeing will align any future hiring with the company's workload, Healy said. Boeing has hired more than 200 Machinists since the beginning of September, according to the union's Web site. The company's second largest labor group, its engineers union, will vote on a new four-year contract offer from Boeing on Dec. 1. Earlier this week, Boeing confirmed a schedule slide for its Everett-built 777 Freighter and its 747-8 revamped jumbo jet. The company hasn't given a new schedule for its delayed 787 Dreamliner but acknowledged the jet won't make its first flight this year as was planned before the Machinists' strike. Additionally, Boeing's 737 single-aisle jet line in Renton recently experienced troubles with faulty parts from a supplier. Carson pointed out that the company's supply chain flagged the problem, a sign that quality and safety measures are running effectively. "We are not at all blind to the fact that we have let our customers down," Carson said. But the company's recent production issues don't mean "anything fundamentally broken" at Boeing, he said. Boeing's shares took a dive Wednesday after another rough day on Wall Street. The company's stock dropped 5.26 percent, or $2.08 per share, to close at $37.48. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Lawsuit blames county and weed inspector in man’s death 2. Cost of dispute falls on Monroe 3. Salish Sea: Huge body of water now has common name 4. Mind if I smoke? 5. Boeing says 787 fixes are done 6. Worker dies after falling 4 stories from Lynnwood building 7. FOOTBALL FORECAST: Battle of unbeatens highlights first week of state-playoff action 8. Granite Falls-area fire chief placed on paid leave 9. Everett dentist travels world to help 10. Benefit to help injured soldier, his family 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Memorial for Peggy Pritchard Olson set • Bazaar Fever • Hawks proud of historic season • Olson always put Edmonds first • Honoring student veterans • ‘Wheedle' author comes to Lynnwood bookshop • Mavs build early lead en route to easy win • Prep football games of the week (state playoffs) • Tears of laughter, tears of grief • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million