Boeing Announces Layoffs, Orders Fall Behind Airbus

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Boeing announced Friday that it will layoff 4500 workers from its commercial aircraft division, beginning with 60-day layoff notices to be issued on Feb. 20 and amid reports that it would lose both the orders and deliveries race to Airbus in 2008. The eight-week-long machinists strike suffered by Boeing did affect the number of aircraft delivered by the company in 2008, which fell behind Airbus' total deliveries for the sixth straight year. The strike that began in September helped Boeing's deliveries in the fourth quarter plummet down to 50 (from 112 a year earlier). In the orders race, where Boeing's net figure fell from 1413 in 2007 to 662 in 2008, Airbus (which hasn't yet reported December figures) earned 756 orders through the first 11 months of last year. The tale of the tape shows that record order numbers in 2007 were halved at Boeing in 2008. Airbus' orders through 11 months are two-thirds that company's 2007 figure. Both companies still have extensive order backlogs -- Boeing alone looks to fill more than 3,700 -- that likely will be whittled down by some degree through deferrals and cancelations. Demand for Boeing's 787 Dreamliner accounts for nearly 900 orders now to be delivered no earlier than the first quarter of 2010. That aircraft is expected to fly in the second quarter of 2009, as the result of a fourth announced delay, and the company's efforts to speed the process has allocated its resources from other projects. A 747 update will now be at least nine months late because engineers have been diverted to the 787 project.

Boeing employs about 76,400 people in Washington State alone, which means its cut represents a 5-percent reduction in its workforce. The order backlog represents years of production work yet to be completed, but Boeing is reacting to what it perceives as a challenging and uncertain market in the years ahead. Those employees headed for the chopping block in February are not expected to come from the company's production lines; Boeing will likely be cutting long-term contractors as opposed to full-time employees, and keeping its production at or near current levels.