EVERETT — The Boeing Co.’s decision to make fewer of its biggest airplanes in the next few years could mean fewer jobs, too, at the company’s plant here, a spokesman confirmed on Wednesday.
The company has said it plans to cut production rates for the 747 this year and for the classic 777 in 2017.
As a result, “we expect some impact on employment and will do our best to mitigate that by placing employees in other jobs across Boeing. We are still studying how many roles may be impacted,” spokesman Doug Alder said after company leaders in Chicago confirmed the 777 rate cuts. Boeing last week announced plans to cut 747 production in half, to six planes a year, by September.
That news Wednesday came as Boeing announced fourth-quarter and year-end results for 2015 and issued a projection for 2016. The company said profit this year would miss analysts’ estimates by more than a dollar per share as it delivers fewer jetliners. Boeing shares plummeted on the news by 8.9 percent, closing at $116.58 on the New York Stock Exchange.
Looking back, Boeing reported fourth-quarter 2015 profit of $1.03 billion — net income of $1.51 per share. Earnings adjusted for non-recurring costs were $1.60 per share. Those results exceeded Wall Street expectations.
During a conference call with reporters and analysts, Boeing executives said the 777 line will slow from the current rate of 100 planes a year to 84 a year — seven planes a month — by 2017. At the same time, the company will start low-rate assembly of the new 777X jetliner at the Everett plant.
There will be fewer deliveries during that transition between the two models, Alder said. “Specific details of this transition plan are proprietary.”
Boeing executives also confirmed plans to make more single-aisle 737s. Workers at the company’s Renton plant assemble 42 a month now. That number is increasing to 47 in 2017, 52 the following year and 57 in 2019. Boeing could increase the 737 production rate to even 63 a month as it battles European rival Airbus Group for airplane sales.
“Generally speaking, increased rates require some level of increased employment,” Alder said.
“The planned rates and market demand mean that we see consistent levels of work for Boeing employees building the 737 in Renton for the foreseeable future,” he said.
Meanwhile, executives said Boeing has turned a corner on the 787 program, which became “cash positive” during the last three months of 2015. That means the company brought in more money delivering 787s than it spent building the composite-material jetliners.
That progress will start to show on the company’s balance sheet for the program by mid-year. By the end of December, Boeing had lost $32.4 billion building 363 787 Dreamliners. That enormous number is expected to plateau this year, then decline. Many analysts, however, do not expect Boeing to ever make all of it back.
During the conference call, Boeing CEO and President Dennis Muilenburg was asked about negotiations with the white-collar union representing Boeing engineers and technical workers. Muilenburg said he wants the company to “treat them with the respect that they deserve.”
Officials with the Society of Professional Engineering Employees in Aerospace (SPEEA) have said that the company took a much more collaborative approach during recent contract negotiations.
Boeing’s labor relations were often strained during the tenure of Muilenburg’s predecessor, Jim McNerney, who stepped down last year.
Bloomberg News and The Associated Press contributed.
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