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Boeing cuts 20,000 more jobs
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December 1, 1998: 8:03 p.m. ET
Aerospace giant to trim production, cut 20% of jobs, due to Asian turmoil
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NEW YORK (CNNfn) - Aerospace giant Boeing Co. Tuesday said it plans to cut 48,000 jobs during the next two years as part of a large-scale plan to cut airplane production in the face of the Asian financial crisis.
The Seattle-based jumbo-jet manufacturer said it decided to reduce the production rates for some of its commercial airplanes after reassessing the impact that economic conditions in Asia will have on air travel and airplane customers.
In July, Boeing announced plans to cut 28,000 jobs. By announcing an additional 20,000 job cuts Tuesday, Boeing will reduce its payroll to 190,000 employees. The 48,000 job cuts amount to 20 percent of Boeing's workforce.
The company eliminated 2,000 jobs from its Wichita, Kansas, plant in October.
Boeing said the increased number of layoffs reflects its revised production plans.
Boeing will cut production of its 747s from 3.5 per month to two a month in late 1999 and to one per month in 2000 "if conditions fail to improve." The company will also trim 757 production to four planes a month from its current level of five, and 767 production to 3.5 a month from four in early 2000.
"Clearly, the economic slowdown in Asia is driving air traffic down which impacts our customers' plans and operations," Alan Mulally, Boeing commercial airplanes president, said in a news release. "Our actions today will match production to market demand to support our customers."
Boeing noted worldwide airline passenger traffic is expected to grow 2 percent in 1998, compared with 6-percent growth in 1997.
"As a result, several customers have requested deferral of deliveries out of 1999 and 2000, and the company is working with the airlines to reschedule deliveries," Boeing said in a statement.
In addition to the job and production cuts, Boeing also lowered its 1999 earnings forecast. The company expects a net profit between $1.5 billion and $1.8 billion, down from a July forecast of $2 billion. Boeing maintained its projection of $58 billion in 1999 revenue.
"There's nothing in here to like," said Joe Campbell, an analyst at Lehman Brothers, referring to the detailed financial projections. "As to how investors will react, the question is not which direction, but how far down will they take the stock."
Campbell and other analysts said they hoped to get an explanation to the latest news from company executives in a conference call scheduled for early Wednesday.
"Clearly it sounds like somebody there has made some pretty hard decisions," said Nick Heymann, an analyst at Prudential Securities. "They are pretty much focused on trying to further rope in expectations."
Boeing (BA) shares slipped 1/4 to close at 40-3/8 inching up to in after-hours trading. 
-- from staff and wire reports
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