|
Boeing keeps 717, cuts jobs
|
 |
December 13, 2001: 12:00 p.m. ET
Output of small jet to be slowed, up to 1,500 helicopter jobs cut.
|
NEW YORK (CNN/Money) - Boeing Co. said Thursday it will keep open plants that build its smallest commercial jet as well as helicopters, ending speculation the facilities would be closed.
But the company said it will cut an additional 1,000 to 1,500 jobs from the helicopter plant in Philadelphia and scale back production of the 100-passenger 717 jet.
The Philadelphia job cuts are on top of the 20,000 to 30,000 the company already announced in its commercial aircraft division due to the drop in business following the Sept. 11 terrorist attack.
Shares of Boeing (BA: up $0.62 to $37.42, Research, Estimates), a component of the Dow Jones industrial average, were higher in morning trading following the announcements.
The world's biggest aircraft maker said Thursday it now expects to take a charge of $700 million, or 86 cents a share, in the fourth quarter to cover all the costs related to changes in operations, including severance, contractual payments to suppliers, and write-down of inventory. That follows the charge of $63 million, or 8 cents a share, it took to cover severance costs during the third quarter.
In its third-quarter earnings release, Chicago-based Boeing said it was reviewing whether to halt production of the 717, an updated version of the McDonnell Douglas DC-9 series it obtained when it bought that aircraft maker. The aircraft's customers are mostly smaller regional carriers whose traffic, like that of major airlines, has dropped sharply in the wake of the terrorist attack.
The company had announced 1,200 job cuts at the Long Beach, Calif., plant that makes the 717 before Sept. 11, but has announced no additional cuts since then, and there were no details of additional job cuts at the plant Thursday. The plant employs about 4,000 to 5,000 in its commercial unit.
As to the Philadelphia plant, the company said cutbacks there are necessary because business continues to decline. It cited lack of new international sales and some production delays for the Chinook helicopter, and lower production rates for the V-22 Osprey airplane, which has rotor engines mounted on its wings that allow it to take off vertically. The plant also makes the RAH-66 Comanche helicopter.
Overall, the company said it continues to see aircraft deliveries in line with its earlier lowered guidance, with 522 deliveries through the end of this year, 350-400 deliveries in 2002, and "a continued downward trend for 2003."
Click here for a look at aerospace stocks
Boeing estimated 2001 revenue of about $58 billion and 2002 sales of about $55 billion, both of which are close to current forecasts of analysts surveyed by earnings tracker First Call. 
|
|
|
|
|
|
|
