Boeing to Cut 1,100 Workers as Orders Drop

Thursday, 20 Jan 2011 01:55 PM

 

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Boeing Co. said Thursday it would lay off 1,100 workers who make its C-17 military cargo plane, as the company scales back production rates after the Pentagon's decision to stop buying.

Boeing spokesman Jerry Drelling said layoff notices would go out starting Friday to workers in Long Beach, California; St. Louis, Missouri; Mesa, Arizona; and Macon, Georgia. The 1,100 workers represent about 24 percent of the total employees on Boeing's C-17 line.

The company said last year its C-17 production rate would drop to 10 a year from 15 after U.S. Defense Secretary Robert Gates said the U.S. military would not buy any more of the planes, which transport troops and cargo to the battlefield.

Boeing said it expected to deliver 13 of the workhorse C-17 Globemaster III planes in 2011, and the slowdown in assembly rates would be completed this summer.

"This is a very difficult decision the company had to make with regards to the workforce," Drelling said.

Boeing said slowing production would allow the company to keep the line open beyond 2012, protecting other jobs on the program. It said it would also help affected workers who were seeking positions elsewhere in the company.

For years, the Pentagon tried to slow or halt new orders for the plane, but Boeing supporters in Congress added dozens of orders to the defense budget.

Those "earmarks" have now dried up, but Boeing is still actively selling the plane overseas.

Boeing has said that the international market for the C-17 is strong and it has received solid interest from India and Kuwait.

"What we're really trying to do is extend the life of the production line so we can capture additional international orders," Drelling said.

About 900 of the job cuts would affect Boeing's main C-17 production plant in Long Beach, California, with about 200 jobs to be eliminated at other sites in Georgia, Arizona and St. Louis, the company said.

Shares of Boeing, a Dow component, were down about 87 cents, or 1.2 percent, at $70.85 in morning trading on the New York Stock Exchange.

Boeing has sold about 226 of the big planes, including 206 to the U.S. Air Force and 20 to international customers such as Britain, Australia and the United Arab Emirates.

© 2014 Thomson/Reuters. All rights reserved.

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