Boeing to cut jumbo production: 3,000 more jobs to be axed as group faces up to industry's problems

BOEING is scaling back production of its 747 jumbo jets and cutting its workforce by 3,000 because of the worldwide slump in aircraft orders.

The company is already in the midst of a big restructuring involving the elimination of 27,000 jobs, but the severity of the problems in the airline industry has forced it to take further action.

Production of the latest model of Boeing's jumbo jet, the 747-400, at present stands at five a month and was scheduled to switch to three a month by February of next year.

Under the plan announced yesterday, Boeing will now build only two of these aircraft each month from January 1995 onwards.

Production of the smaller twin-engine 737 model will be reduced from 10 to 8.5 a month in November next year.

Boeing said the cuts were not tied to any particular customer and the dates for implementation of its new production levels reflected normal manufacturing lead times.

It estimated that the move would result in between 2,000 and 3,000 job losses during the next 12 months, but added that the company-wide employment forecast was still being assessed.

The latest job cuts will hit the Seattle area, where most of Boeing's 119,000 employees work.

However, there will be a knock-on effect at parts suppliers such as Northrop Corporation in California, which makes fuselage sections for the 747.

Ron Woodard, executive vice-president at Boeing, said that the problems in the aviation industry meant that there was 'a continuing inability of many airlines to purchase new equipment.

'Until more customers are in a position to order new aeroplanes, we must reduce our production.'

Boeing is locked in a fierce battle with the European Airbus consortium for aircraft sales around the world.

Although linked to production cuts, the latest lay-offs come against the backdrop of an efficiency drive launched in order to slash costs and gain Boeing a competitive edge over Airbus.

Boeing shares fell by almost dollars 1 in early trading on the New York Stock Exchange as news reached the market, but by midday they had recovered in heavy trading to dollars 38.375 - some 25 cents below the Tuesday close.