Boeing to end 717 production
CHICAGO — Boeing Co. will end production of the 717 jet, its smallest passenger plane, next year, and plans to charge $615 million against earnings before taxes related to that and the loss of a $23 billion deal to supply refueling tankers to the U.S. Air Force.
The big Chicago-based airplane manufacturer said Friday the charge will work out to 48 cents a share for the fourth-quarter and full-year 2004 results, scheduled to be released on Feb. 2, 2005.
Boeing shares closed up 28 cents, at $50.91, on the New York Stock Exchange Friday after being down earlier in the session.
The company will take a charge amounting to about $340 million, or 27 cents per share, before taxes due to the end of the production of the 717 sometime in 2006.
An additional $45 million of expenses associated with the shutdown are expected for 2005 through 2007, according to Boeing.
“Unfortunately, the overall market for the airplane does not support continuing 717 production beyond delivering on our current commitments,” said Boeing Commercial Airplanes President and Chief Executive Officer Alan Mulally.
If no further planes are ordered, the last 717 will roll off the Long Beach, Calif. assembly line in May 2006, a Boeing executive said.
Executives would not say how many of the 2,500 employees would lose their jobs.
Some union workers will be able to transfer to the C-17 cargo plane program, also built in Long Beach. Some salaried workers will be offered jobs at other Boeing plants, the company said.
Boeing confirmed that another 350 jobs will be cut with the closing of a Toronto facility that makes wings for the 717 and other Boeing planes.
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