By Bryan Corliss
Herald Writer
The Boeing Co. plans to lay off between 20,000 and 30,000 workers by the end of 2002 — about a quarter of its commercial airplanes and shared services workforce.
The move is in response to last week’s terror attacks, which have hamstrung Boeing’s airline customers, said Alan Mulally, Commercial Airplanes president and chief executive.
"We profoundly regret that these actions will impact the lives of so many of our highly valued employees," Mulally said in a prepared statement issued Tuesday night.
From Chicago, Boeing chairman and CEO Phil Condit said the cuts were necessary to "enhance the company’s ability to maintain its solid financial position, strong liquidity and premier debt ratings."
It was a "tough business decision," but the moves are "critical factors in times of business uncertainty and financial stress," Condit said.
The move did not specify where the cuts would come, or when.
"These cuts won’t happen overnight, so we have time to explore alternatives," Machinists union president Mark Blondin said in a prepared statement. "Things are changing daily, so the actual number of cuts could be lower."
The company said it is scaling back its projections for deliveries this year and next in response to the changed business environment after the terrorist attacks.
This year’s delivery total, originally set at 538 planes, could be as low as 500, depending on airlines’ ability to pay for the planes, Boeing said.
Next year, deliveries are estimated in the "low 400s," Boeing said. The company recently set the target for 2002 at between 510 and 520.
Estimates for 2003 "indicate a downward delivery trend will continue," the company said.
"The tragedy that has rocked the nation is now personally touching our members here in Puget Sound," Blondin said.
About 60,000 of Boeing’s 93,000 commercial airplane employees work in the Puget Sound area, along with 11,000 of the company’s 18,000 shared services workers, who provide support functions to all divisions.
The Everett factory, where Boeing builds wide-body jets, is the largest single facility, with a workforce of more than 25,000.
On a strictly percentage basis, that could mean Everett would lose 4,500 to 6,750 jobs.
Local officials, who were notified of the layoffs Tuesday afternoon, said they are concerned.
"Across the region, this is a very, very significant economic activity," said Snohomish County Executive Bob Drewel.
Analysts speculated that Boeing would face a serious slump in the wake of last week’s attacks on New York and Washington, D.C., which hammered the already weak airline industry.
"When your major customers are suffering, you’re going to suffer, too," Portland-based analyst John Rogers of D.A. Davidson told The Herald last week.
Orders for new planes had slowed this year because airlines already were struggling as a result of the economic downturn.
Now, with the attack, the industry is looking at combined losses of $10 billion for the year, according to the International Air Transport Association, an industry group that includes most of the world’s major carriers.
In response, U.S. carriers slashed their schedules by as much as 20 percent, idling large portions of their fleets. They also laid off 26,000 workers, and warned Tuesday that the figure could grow to 100,000 within a few weeks.
American, Continental and United — all major Boeing customers — were among those announcing cuts.
Drewel said government, business, labor and nonprofit groups must come together to help the Boeing workers who will lose their jobs in coming months. Those people are "further unintended innocent victims" of the terror attacks, he said. "We need to respond as a community."
U.S. Rep. Rick Larsen, D-Wash., issued a statement Tuesday night saying: "Congress will return to session this week, and you can be certain that my work will begin by seeing how we can help Boeing’s employees and their families. I will do everything in my power to save those jobs."
Blondin said the Machinists plan to work with the company and the state’s congressional delegation to explore options.
"We would hope that some of the $24 billion government airline bailout would be earmarked to preserve American aerospace jobs," Blondin said.
The airline industry has asked Congress for a $24 billion package of relief that would include government loans and tax cuts and $5 billion cash.
The House of Representatives Tuesday responded with a $15 billion plan.
You can call Herald Writer Bryan Corliss at 425-339-3454
or send e-mail to corliss@heraldnet.com.
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