Boeing To Eliminate Another 5,000 Jobs

Boeing Co. on Tuesday announced it would increase its planned job cuts for this year by 5,000 to respond to continued pressure from airlines for lower prices.

The additional cuts, mostly in the Seattle area, are part of Boeing’s efforts to cut costs to meet increasing competitive pressures, the company said in a statement.

“You can’t have consumers wanting lower prices and airlines wanting lower prices without pushing down the cost of an airplane,” said Steve Lewins, transportation analyst at Gruntal & Co. Inc.

Boeing Chairman Frank Shrontz said the company is trying to design and build aircraft more efficiently by trimming the non-manufacturing work force. Boeing had already planned to cut 7,000 jobs this year.

To keep profits growing, Boeing has to cut its costs faster than prices fall, Lewins said.

More cuts are unlikely but possible, Boeing spokesman Christopher Villiers said.

“Obviously this can change with market conditions, but we’re confident that 12,000 is right in the ballpark where we’ll see the reductions at year-end,” he said.

Overall, Boeing employs about 113,900 people, down from about 117,300 at the beginning of the year. Within Washington, where Boeing is the largest employer, the company’s work force has shrunk from 81,964 to 78,828.

As in previous cuts, the additional jobs being eliminated are largely in engineering, management and other non-production work, Villiers said.

“Our manufacturing work force has tracked pretty steadily toward production, and this is not driven by production,” he said. “This is reacting to market pressures to reduce our costs.”

Boeing has laid off about 3,400 workers this year and 6,300 have taken advantage of early retirement incentives.

More employees are expected to choose early retirement with the added benefits by a June 16 deadline, but there are no estimates of numbers, he said.

The next big round of layoffs hits Friday. Villiers said about 2,100 employees had gotten two-week notices. In recent years, the percentage of those who received two-week notices and went on to lose their jobs has varied from 30 percent to 70 percent, sometimes varying widely from month to month, he said.

The company has laid off about 51,000 workers since 1989 as the fortunes of airline customers faltered and competition for the dwindling market from Airbus Industrie and McDonnell Douglas increased.