Published: Thursday, April 9, 2009
Boeing to cut 777 jet production rates in 2010; more layoffs likely
EVERETT -- The Boeing Co. will reduce its production rates for its 777 jet in 2010, making more layoffs likely, the company said Thursday.
Due to dwindling demand, the aerospace giant said it will reduce its monthly deliveries of the 777 to five from seven in June 2010. The company also will delay a plan to increase production on its 747-8 and 767. No change is being made to 737 production rates in Renton.
Boeing already has announced plans to slash 10,000 jobs companywide, including 4,500 in its commercial jet division. Although Boeing is evaluating how the 777 rate reduction will affect employees, it does expect to make more employment cuts as a result, said Jim Proulx, Boeing spokesman.
The production decisions and unfavorable price escalation are expected to reduce Boeing's first-quarter 2009 net earnings by approximately $0.38 per share.
"These are extremely difficult economic times for our customers," said Scott Carson, president of Boeing Commercial Airplanes, in a statement. "It's necessary to adjust our production plans to align supply with these tough market conditions. We are in close contact with our customers as we continue to monitor this dynamic business environment."
Boeing is taking this step in response to airlines' requests to defer twin-aisle jet delvieries. The company has not received any cancellations for its 767, 747 or 777 jets this year.
Boeing's development schedule for the 747-8 Freighter remains unchanged, meaning the revamped jumbo jet's first delivery is still scheduled for third quarter 2010. However, Boeing will slow down subsequent deliveries.
Due to dwindling demand, the aerospace giant said it will reduce its monthly deliveries of the 777 to five from seven in June 2010. The company also will delay a plan to increase production on its 747-8 and 767. No change is being made to 737 production rates in Renton.
Boeing already has announced plans to slash 10,000 jobs companywide, including 4,500 in its commercial jet division. Although Boeing is evaluating how the 777 rate reduction will affect employees, it does expect to make more employment cuts as a result, said Jim Proulx, Boeing spokesman.
The production decisions and unfavorable price escalation are expected to reduce Boeing's first-quarter 2009 net earnings by approximately $0.38 per share.
"These are extremely difficult economic times for our customers," said Scott Carson, president of Boeing Commercial Airplanes, in a statement. "It's necessary to adjust our production plans to align supply with these tough market conditions. We are in close contact with our customers as we continue to monitor this dynamic business environment."
Boeing is taking this step in response to airlines' requests to defer twin-aisle jet delvieries. The company has not received any cancellations for its 767, 747 or 777 jets this year.
Boeing's development schedule for the 747-8 Freighter remains unchanged, meaning the revamped jumbo jet's first delivery is still scheduled for third quarter 2010. However, Boeing will slow down subsequent deliveries.
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