By Bryan Corliss
Herald Writer
Between 20 and 30 percent of the employees at each Boeing Co. commercial jet plant will lose their jobs during the coming layoffs, Commercial Airplanes President and Chief Executive Alan Mulally said Wednesday.
Boeing has not developed a specific layoff plan, a spokesman said. But the implication is that between 5,000 and 7,500 Everett jobs will go by the end of 2002.
They’ll probably stay gone for a year or two, Mulally said, until the world’s airlines recover from financial wounds inflicted by the Sept. 11 terrorist attack.
"If that comes back faster, we all come back faster," Mulally said. "But all our data says we’d better prepare for at least a year."
Elected officials Wednesday pledged government help in assisting the workers, and economists warned that the layoffs will hurt an already-struggling state and regional economy.
"Our economy’s more diverse than ever before, but this is still a significant job loss," Gov. Gary Locke said.
The cuts at Boeing also will affect the companies that supply it with parts, Mulally said, projecting they may be faced with layoffs as well.
Boeing brass was meeting Wednesday to figure out a plan for how it will shed as many as 30,000 jobs from its Commercial Airplanes and Shared Services groups, spokesman Tom Ryan said.
"They’ve been agonizing over this," he said. "It’s not easy. We’re talking about people’s livelihoods here."
But as yet, there hasn’t been a decision on when or where layoffs will start, Ryan said.
| Boeing employees
Boeing Commercial Airplanes
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Union contracts say the company must give workers 60 days’ notice before a layoff. The Society of Professional Engineering Employees in Aerospace said it typically takes Boeing about a month after announcing layoffs to start issuing notices to affected employees.
Mulally called the decision to order layoffs "absolutely gut-wrenching." After its disastrous performance in 1998, Boeing had performed a remarkable turn-around, "one of the finest turn-arounds in the history of business," yet now he is laying off the very employees who made that happen.
He flatly denied assertions made by some — including Everett machinist David Clay — that the company was using the terror attack as a pretext for previously planned job cuts.
"Absolutely not," he said. "From a business sense, that doesn’t make any sense at all."
"We have to deal with reality," Mulally said. And the reality is that air travel has plummeted since the attack, and U.S. airlines can’t afford to keep the planes they already have flying, let alone buy new ones.
"What we’re worried about the most is the liquidity of the airlines," Mulally said. "Some of them will be running out of cash."
Locke said the state will extend limits on unemployment insurance payments to displaced workers, so that they won’t run out of cash so fast.
"We’re going to do everything we can for affected Boeing workers and their families," Locke said. That will include job training and help for the workers to find new jobs, he said.
He said he also is working with Washington’s congressional delegation to urge support for the proposed airline bailout, and for assigning sky marshals to flights, a move Locke said will boost public confidence in the safety of air travel.
Union officials also pledged support for their members.
"Our focus is on the welfare of the employees," said Charles Bofferding, the executive director of the Society of Professional Engineering Employees in Aerospace. "We will do everything we can to ensure employees are taken care of and treated fairly."
The union will ask Boeing to consider alternatives to layoffs, like job sharing, voluntary retirement or transfers of workers to other
SPEEA President Craig Buckham and Machinists union President Mark Blondin said they would like to see some of the proposed airline industry bailout being discussed in Congress go to help Boeing.
The proposed government bailout would keep them solvent through the crisis, Mulally said, and that would help Boeing indirectly.
But Boeing is not looking for any direct support from the government, Mulally said.
"There’s only so much money that we, the taxpayers, can help with," he said. "If the government can maintain (so that) the airlines stay solvent, that’s the best thing for Boeing."
So far, no airlines have actually canceled firm orders, but they are asking Boeing to delay deliveries, Mulally said. "They want the airplanes," he said. "The conversation we’re having is when they get the airplanes, not if."
These layoffs will not be as extreme as the infamous "Boeing Bust" of 1969-71, said Christopher Haugen, an analyst with the Northwest Policy Institute at the University of Washington. Then, Boeing shed more than 60,000 jobs, leading to the famous billboard urging the last person to leave Seattle to please turn out the lights.
But these layoffs are going to be compressed into a much-shorter time frame, and they’re coming at a time when the local and national economies were slumping, Haugen said. As a result, a recession "appears likely at this point," he said.
It will be felt statewide, he said. "The rest of the state was struggling much more than Puget Sound was."
How bad will it be here? "Until we can see some actual numbers, it’s hard to know," said Donna Thompson, a state labor economist based in Everett.
A lot will depend on the timing of the layoffs, she said. And the transfer of jobs related to Boeing’s Sonic Cruiser — Mulally said that work will continue — will mitigate the effects some.
Clearly there will be a significant drop in aerospace employment in Snohomish County, which accounted for 31,700 jobs in August, she said.
But otherwise, "the crystal ball is really cloudy," Thompson said. "Everything is happening so fast."
You can call Herald Writer Bryan Corliss at 425-339-3454
or send e-mail to corliss@heraldnet.com.
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