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Boeing: Consolidation
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August 18, 2000: 2:53 p.m. ET
Cost-cutting plan will reassign 3,500 workers within aerospace company
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NEW YORK (CNNfn) - Boeing Co. announced on Friday its plan to shut down certain manufacturing operations in the state of Washington, and reassign some 3,500 employees, as part of a continuing effort to cut costs and streamline its core businesses.
The decision comes amid steady operational tweaking at Seattle-based Boeing, which has made several moves in the past 18 months aimed at focusing its business on core operations, reducing costs and improving profits.
Under the plan, Boeing will consolidate its tool-fabrication operations in its Wichita, Kan., factory. Of about 2,400 tooling employees in the Seattle area, about 350 will be retrained, while the other 2,050 will remain to provide support for production tools.
The company will also move work from four sub-assembly shops -- three in Washington and one in Kansas -- within its Commercial Airplanes group, to other suppliers inside and outside the company. The move will take about two years to complete and affect about 900 employees.
Other moves include moving some military work to St. Louis, Missouri, and chemical processing work to other locations inside and outside of the company.
In December 1998, the company revealed its intention to trim some 48,000 to 53,000 jobs by the end of 2000. The spokesman said the company now employs about 187,000 people.
A company spokesman said the reassignment plan "should not result in any additional job losses."
Friday's announcement confirmed details revealed on Thursday by Boeing's machinists union, the company's largest, which was briefed on the plans earlier this week.
 "The consolidations eventually will affect about 3,500 Puget Sound employees whose job assignments will transfer or otherwise change by varying degrees over the next three years," said Boeing, whose products include commercial airplanes, military aircraft and missiles.
The company said it is committed to honoring all of its labor agreements, and added that all affected workers are expected to be transferred to other positions in the company.
In June, Boeing put up for sale a St. Louis manufacturing facility that employs 1,700 workers. Also in June, the company said it would cut 900 jobs over two years at its Huntington Beach, Calif., facility as it shifted work on Delta rockets to Colorado and Alabama.
Overall, the company has shed some 49,000 jobs from a 1998 peak of 238,000, and has said it wants to see its payroll shrink to 180,000 by the end of the year.
"The steps we're announcing today support our goals to run a healthy business, offer stability to our employees, and enhance shareholder value," said Fred Mitchell, a Boeing executive vice president.
"We have considerable capacity challenges in our factories; some are running at only 30 to 50 percent of capacity," said Mitchell. "Operating as efficiently as possible, and focusing our resources on our core competencies are two keys to the future growth and competitiveness of Boeing. Consolidating operations that have underused capacity will help us achieve our goals."
Shares of Boeing (BA: Research, Estimates) eased 3/8 to 45-1/3 Friday afternoon. 
-- from staff and wire reports.
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The Boeing Company
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