Saturday May 26, 7:53 AM
Boeing To Cut 600 Jobs In Long Beach, Calif >BA
SEATTLE (AP)--Boeing Co. (BA) will cut 600 jobs at its Long Beach, California, commercial aircraft plant because of less demand for its 717 jetliner and orders lost after American Airlines' acquisition of Trans World Airlines, company officials confirmed Friday.
Boeing spokesman Warren Lamb said that American canceled orders for 20 717s after buying most of TWA's assets during a bankruptcy sale earlier this year.
TWA had originally ordered 50 717s, Lamb said, and had already taken delivery of 15 when it filed for bankruptcy protection. American said it will only take 15 more.
"It is a factor along with other factors, obviously," Lamb said of the reduced order.
Lamb said Boeing had already given 50 to 75 employees notice and would complete the bulk of the layoffs in the second half of the year. The layoffs will affect managers, engineers and mechanics, he said.
Lamb would not comment on the severance package laid-off workers will receive.
Boeing employs about 5,000 people in its commercial aircraft division in Long Beach. About half of them work on the 717, the smallest commercial jet Boeing makes and the only jetliner currently built at the Southern California plant.
Launched in October 1995, the 717 seats 106 passengers and is designed to fly short routes.
Boeing has received 156 firm orders for the 717 and delivered about 60, Lamb said.
Paul Nisbet, an aviation analyst with JSA Research in Newport, Rhode Island, speculated that Boeing also may have become more efficient at making 717s since the program was launched by McDonnell Douglas. Boeing inherited the 717, then called the MD-90, when it bought McDonnell Douglas in 1997.
Nisbet also said the company had hoped for large orders from China, which has seen increasing demand for short, regional flights in the past decade. But in the late 1990s, China was forced to cut back its airline expansion plans because airports didn't have enough capacity, Nisbet said.
He expects Chinese interest in small planes to pick up again soon, possibly increasing interest in the 717.
Company spokesman Tom Ryan said no layoffs are currently planned at Boeing's commercial airplane plants in the Seattle area, where 78,900 employees work on Boeing's other jetliners.