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Boeing May Cut 5,000 More Jobs; Strike Expected to Hurt Earnings

Aerospace: Downsizing effort continues. Engineers' walkout may slow aircraft deliveries into next quarter.

March 10, 2000|From Associated Press

Aerospace giant Boeing Co. said it may cut 5,000 more workers this year as part of its continuing downsizing. It added that a strike by engineers and technical workers could slow aircraft deliveries through this summer, affecting the company's earnings.

In a filing with the Securities and Exchange Commission, Seattle-based Boeing said it should have 180,000 to 190,000 employees at the end of the year, compared with an earlier target of 185,000 to 195,000 announced six months ago. Most of the jobs will be trimmed through attrition and reorganization, the company said.

"This is a revised projection, and doesn't necessarily mean that we will be laying off 5,000 people," said Boeing spokesman Peter Conte. He said the additional job cuts were not related to the strike, and would not speculate on whether the small but increasing number of engineers who are quitting the company would affect any potential layoffs.

Boeing has reduced its work force from about 228,000 to 194,100 workers over the last year. Conte said the company's attrition rate is 9,000 to 10,000 positions annually, which will likely make up most of the additional cuts.

He added that some people may get laid off as part of reorganization or consolidation efforts, though he declined to provide details.

The company also confirmed that its first-quarter earnings will be affected by the strike that sent 17,000 engineers and technical workers to the picket lines a month ago.

The strike will affect Boeing's ability to deliver commercial aircraft in the first quarter, and may affect earnings and deliveries in its second quarter, the company said.

Boeing said the impact on earnings depends on how long the members of the Society of Professional Engineering Employees in Aerospace stay out. The commercial airplane division has seen the most immediate impact, because SPEEA engineers are needed to certify the planes.

"The effects on the second quarter really depend on when the engineers come back and how we implement our post-strike recovery plan," Conte said. "We do need those employees, and we've asked them to come back for the good of this company."

SPEEA officials did not immediately return calls seeking comment.

The union members walked out a month ago after contract talks collapsed. The engineers and technical workers are pressing for guaranteed bonuses and a benefits package that does not include increased health insurance payments.

Boeing shares rose 38 cents to close at $33.75 on the New York Stock Exchange.

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