Boeing to slash its output

  • Bryan Corliss / Herald Writer
  • Wednesday, January 23, 2002 9:00pm
  • Business

By Bryan Corliss

Herald Writer

The Boeing Co. will drastically cut back on production during the next two years, a move that likely means it will follow through on plans to lay off 30,000 workers, top company officials said Wednesday.

Chairman Phil Condit said Boeing, which delivered 527 jets last year, will build about 380 planes this year and 275 to 300 in 2003.

Those production cuts won’t mean layoffs beyond the 30,000 already predicted. But that could change if conditions worsen.

"If we go lower, we’re going to have to make the cuts to go with it," Condit said as the company released its 2001 year-end financial results Wednesday.

Boeing eliminated 9,000 jobs during the last quarter of 2001, but it counted severance for all 30,000 people to be laid off against this year’s earnings, chief financial officer Mike Sears said.

The company to date has given layoff notices to 19,000 workers, about 11,600 of them around Puget Sound.

Despite the cutbacks, Boeing delivered 527 jets last year, up from 489 in 2000, Condit said. That’s a remarkable total, he added, given the disruptions caused by the February earthquake and the September terrorist attacks.

Condit said he couldn’t say when orders would start to rebound, and he sidestepped a question about Airbus officials who have projected the two jet builders would split about 650 orders this year.

"It’s going to be really tough to estimate what the sales look like" in 2002, he said. "In a period like this, there’s too much fluctuation to predict orders."

Likewise, there’s no knowing whether 2003 will see the market bottom out or continue to fall, Condit said. "We don’t have good insight today when that’s going to go back up."

Boeing could get some good news today. The company has scheduled a press conference with Ryan Air, a European discount air carrier that previously said it was in talks to buy as many as 100 737s.

Condit wouldn’t comment on the Ryan Air announcement Wednesday.

Boeing will continue research into the Sonic Cruiser and other new airplanes, including a longer-range version of the 777, Condit said.

The Sonic Cruiser’s launch date is in flux given the post-Sept. 11 airline crisis, Condit said.

"It is clearly different than it was," he said. "It depends a lot on the airline customers."

The company’s fortunes changed dramatically with the September terrorist attacks.

For the year, Boeing reported strong growth in both profit and revenue. Profits rose 20 percent, from $2.5 billion in 2000 to $3 billion. Revenues increased 13 percent, from $51.3 billion to $58.2 billion. Earnings per share increased 26 percent, to $3.63.

For the fourth quarter, however, Boeing’s profits plummeted from $481 million to $100 million. Revenue climbed 7 percent, to $15.7 billion. Earnings per share for the quarter tumbled to 12 cents, down from 55 cents in the fourth quarter of 2000.

Boeing’s Seattle-based Commercial Airplane Group reported year-end revenues of $35.1 billion, up from 2000’s total of $31.2 billion.

However, profits fell to $2.6 billion, down from $2.7 billion, due to the cost of severance packages for laid-off workers. Without that cost, the group would have shown a profit of $3.5 billion and a 10.1 percent profit margin, the company said.

Commercial’s fourth-quarter profits evaporated, falling to $82 million, compared with $856 million for the same quarter of 2000.

The company told analysts it expects revenue to drop from $58 billion to $54 billion in 2002 and to about $52 billion in 2003.

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.