Boeing has announced that it will lay off between 20,000 and 30,000 workers in its commercial jet unit by the end of 2002 in anticipation of a sharp drop in orders from a troubled airline industry rocked by last week's attacks on New York and Washington.
Boeing, the world's biggest jet maker, cut its forecasts for aircraft deliveries and said the downturn could run into 2003 as US airlines reduce capacity after hijacked passenger planes slammed into the World Trade Center in New York and the Pentagon near Washington last week.
The planned job cuts would cover all jet models and be spread across Boeing's various commercial jet sites, where 96,600 people design and build airplanes, including many airframe components, as well as a business unit that provides support services.
'We profoundly regret that these actions will impact the lives of so many of our highly valued employees,' Alan Mulally, president of Boeing's jet unit said in a statement. 'However it is critical that we take these necessary steps now to size the business to support the difficult and uncertain environment faced by our airline customers.'
Mulally said Boeing could not yet say what impact the restructuring would have on its earnings. Jet deliveries might only total 500 this year, down from an earlier forecast of 538, the company said.
The company also slashed its projection for 2002 deliveries to the 'low 400s compared to the 510 to 520 previously forecast' and said deliveries would likely fall even further in 2003, without providing a specific estimate.
The sharp reduction in its delivery forecast was in line with the 20% capacity reduction by US carriers and its own view of global air traffic, the jet maker said. The only good news was that while Boeing customers have been delaying scheduled deliveries, they have not yet taken the more drastic step of canceling planned purchases, Mulally added.
Boeing said it would press ahead with the development of strategic, next-generation aircraft, such as the high-speed sonic cruiser jet, even as it considered delaying some upgrades to current aircraft models.
The company also said it was working closely with the US government to improve jet safety and that an internal initiative was already underway to solicit and review ideas submitted by Boeing engineers.
'After 31 years designing airplanes, I never in my wildest dreams thought a commercial jet would be used as a weapon,' Mulally said.
* Aer Lingus said yesterday that it is cutting its operations by 25% and discontinuing some transatlantic services in the wake of last week's terrorist attacks in the US. The airline's Stockholm route is also being axed and there will be fewer flights to London, Glasgow, Paris and Amsterdam. Up to 1,700 jobs are risk.
Budget airline Ryanair says it does not believe its business will be significantly affected.
