All of us are going to feel this

  • Bryan Corliss / Herald Writer
  • Thursday, September 20, 2001 9:00pm
  • Business

By Bryan Corliss

Herald Writer

SEATTLE — Several of the Boeing Co.’s airline customers could be bankrupt "within a couple of days," Boeing Commercial Airplanes President and Chief Executive Alan Mulally said Thursday.

That’s bad news for Boeing and its workers, because the company’s layoff plans are based on the assumption that the airlines will remain financially viable, Mulally said. If they don’t, "It could get worse," he said.

Mulally was the keynote speaker at the Greater Seattle Chamber of Commerce’s annual meeting Thursday. The event was scheduled months before the Sept. 11 terrorist attack and the subsequent crisis in the airline industry that has prompted Boeing to announce plans to lay off 20,000 to 30,000 workers by the end of 2002.

Boeing has stopped hiring people to build passenger jets and is working on a plan to scale down production, Mulally said.

After that plan is in place, sometime in the next "couple of weeks," layoff notices will start going out, Mulally said. In the meantime, the workforce will shrink through natural attrition and retirement.

Mulally said the company is "going to do everything we can to do the right thing" for laid-off employees and their communities. He again denied critics’ claims that Boeing is using the current crisis as a pretext to slash Puget Sound area employment.

"Nobody runs a business that way," Mulally said. "The economy was slowing, but we were going to deal with that."

Boeing will be "very fortunate" even to hit its scaled-down target of 500 deliveries this year, Mulally said. Before the crisis, the company had planned to deliver 538 jets.

Boeing is working with banks and aircraft leasing companies to help arrange better financing for the airlines. The relatively new Boeing Capital Corp. could end up being the owner of a number of those planes, which it would then lease to airlines, he said.

But chances are, Boeing will end up building planes this year that the airlines can’t use, Mulally said. Those planes, perhaps 38 of them, would go into storage.

Without an upturn in air travel, the situation for the next few years will get worse, Mulally said. Boeing projects deliveries will drop to the "low 400s" in 2002, and production could fall even lower in 2003.

"If there’s no growth (in air travel), 70 percent of all the airplanes being produced by Boeing and Airbus are not needed," Mulally said.

But advanced ticket booking is down by 40 percent since the attacks, and airlines are flying planes that only are 30 percent full, he said.

That underscores the urgent need for the industry and federal government to work together on a plan to restore confidence in the air travel system, and for the government to take steps to stabilize airline finances, Mulally said.

"The most important thing is the liquidity of the airlines right now," he said.

He asked Seattle’s business leaders to maintain "an attitude of dealing with the situation."

"Everybody in this room is associated with Boeing, one way or another," Mulally said. "All of us are going to feel this."

You can call Herald Writer Bryan Corliss at 425-339-3454

or send e-mail to corliss@heraldnet.com.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.