Published: Wednesday, January 28, 2009
Boeing to cut 10,000 jobs, posts $56 million loss
Company sees 787 cancellation
In response to challenging economic times, the Boeing Co. will lay off a total of 10,000 workers in 2009.
Boeing reported on Wednesday a quarterly loss of $56 million due to the Machinists strike, problems with its 747. For the full year, Boeing’s net income fell 34 percent to $2.7 billion compared to 2007.
“We were not satisfied with our results in 2008,” said Jim McNerney, Boeing's chief executive, in a call with media and analysts Wednesday.
But Boeing is taking steps — including reducing its workforce by 6 percent and reorganizing its commercial jet operations — to put itself in a better position for 2009.
In response to the tough economy, Boeing expects layoffs to increase to a total of 10,000 jobs. The company recently said it would let go about 4,500 commercial airplane workers. It handed out 190 layoff notices to Shared Services Group workers earlier this month and predicted 800 defense cuts at its Wichita site.
Boeing's McNerney doesn't expect those layoffs to be in its commercial airplanes division. The company employs thousands of non-commercial airplanes workers -- including both defense and Shared Services employees -- in Washington state.
Gov. Chris Gregoire said that she's troubled by the additional layoffs announced by Boeing and plans to talk today with Scott Carson, president of Boeing Commercial Airplanes.
"Aerospace, along with many other Washington industries, is being hit especially hard by the national recession," Gregoire said in a statement. "My thoughts are with those employees and their families who will be affected by today’s announcement."
Despite a predicted decline in jet orders and anticipated deferrals or cancellations, Boeing doesn't plan to decrease its production rates. Boeing's commercial jet backlog for 2009 is "significantly" overbooked, giving the company wiggle room to absorb as many as 50 to 100 deferrals or cancellations, McNerney said. In 2009, the company expects to deliver 480 to 485 jets.
Boeing has received a major cancellation -- its first -- for the company fast-selling 787 Dreamliner. The company reported a cancellation for 15 of its delayed 787 Dreamliner jets. McNerney said he expects a "modest churn" of orders and cancellations for the jet this year.
Boeing reaffirmed the date it gave in December for the 787's first flight: second quarter 2009. Boeing intends to deliver its first 787 in the first quarter of 2010.
The company estimates the Machinists’ strike cost the company about 70 jet deliveries worth $1.2 billion. Boeing’s full-year earnings per share fell to $3.71 from $5.28 in 2007.
"The progress we made in many areas of Boeing during 2008 was outweighed by
the impact of the strike and our performance on some key development programs," McNerney said.
"Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times."
Boeing Machinists staged a 57-day strike last fall in a contract dispute. The company said the strike further delayed its 787 Dreamliner as well as deliveries of its 777 Freighter. Boeing also pushed back the delivery of its new 747-8 program. A charge on the 747 program cost the company $685 million in earnings.
Boeing estimates its 2009 revenues at $68 billion to $69 billion and its earnings per share at $5.05 to $5.35. The company plans to deliver 480 to 485 commercial jets this year, saying it will help finance some aircraft deliveries in the first quarter.
The company's shares were down 20 cents at noon Pacific Standard Time.
Boeing reported on Wednesday a quarterly loss of $56 million due to the Machinists strike, problems with its 747. For the full year, Boeing’s net income fell 34 percent to $2.7 billion compared to 2007.
“We were not satisfied with our results in 2008,” said Jim McNerney, Boeing's chief executive, in a call with media and analysts Wednesday.
But Boeing is taking steps — including reducing its workforce by 6 percent and reorganizing its commercial jet operations — to put itself in a better position for 2009.
In response to the tough economy, Boeing expects layoffs to increase to a total of 10,000 jobs. The company recently said it would let go about 4,500 commercial airplane workers. It handed out 190 layoff notices to Shared Services Group workers earlier this month and predicted 800 defense cuts at its Wichita site.
Boeing's McNerney doesn't expect those layoffs to be in its commercial airplanes division. The company employs thousands of non-commercial airplanes workers -- including both defense and Shared Services employees -- in Washington state.
Gov. Chris Gregoire said that she's troubled by the additional layoffs announced by Boeing and plans to talk today with Scott Carson, president of Boeing Commercial Airplanes.
"Aerospace, along with many other Washington industries, is being hit especially hard by the national recession," Gregoire said in a statement. "My thoughts are with those employees and their families who will be affected by today’s announcement."
Despite a predicted decline in jet orders and anticipated deferrals or cancellations, Boeing doesn't plan to decrease its production rates. Boeing's commercial jet backlog for 2009 is "significantly" overbooked, giving the company wiggle room to absorb as many as 50 to 100 deferrals or cancellations, McNerney said. In 2009, the company expects to deliver 480 to 485 jets.
Boeing has received a major cancellation -- its first -- for the company fast-selling 787 Dreamliner. The company reported a cancellation for 15 of its delayed 787 Dreamliner jets. McNerney said he expects a "modest churn" of orders and cancellations for the jet this year.
Boeing reaffirmed the date it gave in December for the 787's first flight: second quarter 2009. Boeing intends to deliver its first 787 in the first quarter of 2010.
The company estimates the Machinists’ strike cost the company about 70 jet deliveries worth $1.2 billion. Boeing’s full-year earnings per share fell to $3.71 from $5.28 in 2007.
"The progress we made in many areas of Boeing during 2008 was outweighed by
the impact of the strike and our performance on some key development programs," McNerney said.
"Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times."
Boeing Machinists staged a 57-day strike last fall in a contract dispute. The company said the strike further delayed its 787 Dreamliner as well as deliveries of its 777 Freighter. Boeing also pushed back the delivery of its new 747-8 program. A charge on the 747 program cost the company $685 million in earnings.
Boeing estimates its 2009 revenues at $68 billion to $69 billion and its earnings per share at $5.05 to $5.35. The company plans to deliver 480 to 485 commercial jets this year, saying it will help finance some aircraft deliveries in the first quarter.
The company's shares were down 20 cents at noon Pacific Standard Time.
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