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. Waves wash away Explosion's title hopes 2. You've got your pick of Fourth of July fun 3. Snohomish entrepreneur bounces back with new venture 4. Inslee downplays fears Boeing will send second 787 line elsewhere 5. Popular park changing hands 6. Deputies shoot armed man near Arlington 7. Why, governor? 8. Edmonds backs off red-light cameras 9. Vehicle that killed girl was Chevy Astro minivan 10. Arlington buys up more water rights 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Warriors looking for balance • Three Scots vying for QB slot • Jackson looks for another title • Decorated veteran continues to serve as active volunteer • City Council reviewing sign regulations • Wildcats get a peek at newcomers • Lynnwood still in rebuilding mode • Shoreline feels a kindergarten growth spurt • Leave the patriotic pyrotechnics to professionals, cities urge • Trading dollars for kilowatts New PUD energy conservation programs save ... • By John Wolcott SCBJ Editor • Record crowd at Paine Field’s General Aviation Day as FHC Celebrate ... • Celebration of aviation's history and future presented in multiple venue ... • The time is ripe for small businesses to take no prisoners • EPA proposal to regulate global-warming gases would be costly for small ... • Innovation helps the town of Forks to offset tough economy • Powering the people