Boeing to Cut Up to 5,000 More Jobs

July 17, 2003
By August Cole, CBS.MarketWatch.com

SAN FRANCISCO (CBS.MW) -- Boeing said Thursday that it will cut between 4,000 and 5,000 more jobs in its commercial aviation group by the end of the year, as the world's largest aerospace company struggles with the airline industry's downturn.

The move follows the 5,000 jobs cuts that were announced last November and will leave Chicago-based Boeing with about 55,000 to 56,000 people in the commercial group.

"While we are optimistic about the long-term outlook for the industry, many of our airline customers continue to face significant challenges as they struggle to recover their financial health and regain the ability to order new airplanes and related services," said Alan Mulally, the head of Boeing's commercial group.

Most of the cuts will come from the Puget Sound region of Washington State and will be across the board, though salaried workers are going to be the focus, said Boeing spokesman Peter Conte.

"We're having to size our production level and size to the demands of the market," he said.

Boeing's commercial group was dealt another blow this week when Continental Airlines said it would defer part of a $2.5 billion jet order. In light of the latest quarterly reports from not only Continental, but also Northwest Airlines and Delta Air Lines, executives remain guarded in their outlook.

Since the Sept. 11 attacks, Boeing has lost 33,890 workers. About two-thirds of those jobs were lost in the Puget Sound region, home to the commercial group.

In contrast, Boeing's St. Louis, Mo.-based defense and space group, now called integrated defense systems, has about 78,000 workers and, for the first time this year, is expected to produce more than half of the company's revenue. There too, however, Boeing is under fire over its conduct in a key Air Force rocket contract and just announced that it has all but given up on the commercial space launch business.

Shares of the Dow component fell 36 cents to $33.04.

August Cole is spot news editor at CBS.MarketWatch.com in San Francisco.

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