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Boeing to lay off 20-30K
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September 19, 2001: 4:32 p.m. ET
Company says it will reduce payroll by 20,000-to-30,000 by the end of 2002
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NEW YORK (CNNfn) - Shares of Boeing Co. recovered Wednesday afternoon, ending slightly lower after experiencing an initial plunge when it announced layoffs of 20,000-to-30,000 workers.
Boeing (BA: Research, Estimates) stock fell 53 cents to $32.61 after dropping as much as 3 percent in opening trade.
The company said it will lay off workers in its commercial jet unit by the end of 2002 as a result of dwindling orders in the wake of the terrorist attack against the United States.
"We profoundly regret that these actions will impact the lives of so many of our highly valued employees," Alan Mulally, president and CEO of Boeing Commercial Airplanes, said late Tuesday. "However, it is critical that we take these necessary steps now to size the Commercial Airplanes business to support the difficult and uncertain environment faced by our airline customers."
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 CNNfn's Kitty Pilgrim takes a closer look at Boeing's plans to cut up to 30 percent of its work force. |
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"We're looking at a major aerospace dislocation," said Christopher Mecray, an analyst with Deutsche Banc Alex. Brown, who rates Boeing shares "market perform."
"My sense is that the stock is going to stabilize here," Mecray said. "You get much lower than this and it starts to get to be real overreaction."
"I think (the stock) is probably going to stabilize in the 30s," he said. "I would look for the stock to recover as commercial aerospace stabilizes."
Most of the major airlines have reduced their schedules in the past week after four commercial flights were hijacked in the attacks on New York and Washington. Three of the flights struck the World Trade Center in New York and the Pentagon near Washington; the fourth hijacked jet crashed in Pennsylvania when passengers apparently fought the hijackers.
Boeing had expected to deliver 538 aircraft in 2001. It said that number could now decline to 500 depending on airlines' ability to take delivery in the near term. For 2002, Boeing said deliveries are estimated to be in the low 400s, compared with the 510-to-520 it previously forecast.
Boeing employs about 199,000 workers.
In a hastily arranged news conference at the unit's headquarters south of Seattle, Mulally said Boeing could not yet say what impact the restructuring will have on its earnings.
Airbus cautiously optimistic
Boeing's European rival Airbus told CNN it was "monitoring the situation and was cautiously optimistic in the medium to long term."
Airbus last month lowered its forecast of plane deliveries in 2003 to 400 from 450 amid a rapidly weakening airliner market.
European airlines that are dependent on North Atlantic routes for much of their revenue are reducing capacity to match a downturn in demand in the aftermath of the U.S. terrorist attacks and an economic slowdown.
The airline industry will meet the European Commission on Wednesday to see if the executive arm of the European Union will offer them some financial support.
British Airways (BAY), Europe's biggest airline, signaled it plans to cut more jobs and reduce capacity on North Atlantic routes. 
-- from staff and wire reports
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Boeing
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