Boeing Takes Big Charge, Expects Loss Early-Retirement Program Blamed For $600 Million Hit

An early-retirement program that was adopted to avoid layoffs and cut long-range costs at the Boeing Co. will result in a loss for the quarter, only the second quarterly loss for the company in about 25 years.

A one-time, non-recurring charge of $600 million was announced Friday, about $200 million to $250 million more than initial projections. The expense is expected to be $390 million after taxes on a year-end basis.

Boeing stock closed at $64.75, down 75 cents a share Friday on the New York Stock Exchange.

As a result of the company’s first retirement program, few workers are likely to get pink slips during the rest of the year, Boeing officials said.

“It allowed us to meet our objective of reducing employment while minimizing layoffs and retaining the skills we need to expand our leadership position in a very competitive global marketplace,” Chairman Frank Shrontz said.

Boeing’s plan to eliminate 12,000 jobs this year is about complete, spokesman Christopher Villiers said.

The charge far outstrips the $195 million in operating profits that William Whitlow, an analyst at Pacific Crest Securities, said he was anticipating for the three months ending June 31. Boeing is scheduled to announce second-quarter results July 25.

Boeing’s last quarterly loss, in the fourth quarter of 1992, reflected a one-time write-off for a legally required change in computing retiree medical benefits.

The last quarterly operating losses were early in the 1969-72 “Boeing Crash,” when plummeting aircraft orders, loss of military contracts and cancellation of the supersonic transport triggered layoffs amounting to two-thirds of the company’s work force.