Boeing Reverses Course On 747 Work
October 19 2016 - 1:30PM
Dow Jones News
Boeing Co. plans to shutter a small defense plant that had been
earmarked to make parts for the 747-8 jumbo jet, adding to a tally
of almost 6,700 net jobs shed since the start of the year.
The aerospace group told the plant's workforce of the move this
week, though the head of the 747-8 program said in a message to
employees that it wasn't a sign that Boeing planned to end jumbo
production "in the near term."
Boeing last year said it planned to create up to 200 new jobs at
the Macon, GA facility by insourcing work on making fuselage panels
for the jumbo jet, but has reversed course after cutting 747 output
to just six a year and flagging it may end production
altogether.
The Macon facility's work on military aircraft is due to run out
in December, and the workforce has shrunk to 120 from about 500 in
2011. The 747-8 work was due to be transferred from Triumph Group
Inc., which Boeing said remains under contract for the business
through the end of decade.
"We determined that there is not currently a business case to
place 747 work in Macon, and the slower production rate gives us
more time to make a work placement decision," said 747-8 general
manager Bruce Dickinson in the message to staff.
The Macon staff all work for Boeing's defense unit and the
company's overall head count had already fallen by 6,659 since the
start of the year to 154,709, as of its latest update on Sept. 29.
Most of the 4.1% drop was focused on its commercial airplanes unit,
including a mix of voluntary layoffs, attrition and some compulsory
cuts. The group workforce fell 2.5% in 2015.
Ray Conner, head of the Commercial Airplanes unit, warned in
February that Boeing needed to cut costs to compete with Airbus
Group SE
While orders for its 737 jet are booming and the 787 Dreamliner
has secured a spate of deals in recent weeks, new work on the 747-8
and the twin-jet 777 has been tougher to find, forcing Boeing to
examine production rates.
Boeing said in July that it might stop 747 production, citing in
part the slowdown in air cargo traffic that has dampened demand for
the freighter version.
The company reports third quarter earnings on Oct. 26, with
analysts expecting it may trim production rates on the existing 777
plane ahead of the introduction of a revamped model.
Boeing has 15 outstanding orders for the 747-8, including six
for the cargo version, and 151 for the existing 777.
The company has rented rather than sold some 747 cargo jets to
customers, and Jefferies & Co. said in a client note Wednesday
that three more had been leased in the past quarter. Boeing
declined to comment.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
October 19, 2016 13:15 ET (17:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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