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Boeing layoffs coming

20,000 or more to lose their jobs

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SEATTLE — A week after terrorists hijacked four Boeing airplanes in an attack that killed thousands of people, Boeing Co. conceded that it will not be able to immediately recover from the damage done to the aviation industry.

America's largest aerospace company said late Tuesday it plans to lay off 20,000 to 30,000 commercial airplane workers by the end of 2002 as a result of the aerospace business impact of last week's terrorist attacks.

"This is a horrible situation," Boeing Commercial president and chief executive Alan Mulally told reporters late Tuesday. "We were on a very positive track, and this is a very sad thing for all of us."

The company will likely start handing out pink slips within three weeks, with layoffs to begin about two months later, he said. Layoffs will be made across the board, across the country and across all airplane models, he said.

Deliveries for 2001, which had been expected to be 538 aircraft, could be as low as 500, he said. For 2002, deliveries are estimated to be as low as 400, compared with the 510 to 520 previously forecast.

"It looks like there are more innocent victims of the terrorist bombing," said Charles Bofferding, executive director of SPEEA, Boeing's white collar engineering union.

Roughly 93,000 people work for Boeing's commercial airline sector, much of which is centered around the company's former headquarters in Seattle. Boeing's corporate headquarters is now in Chicago.

Boeing also saw major layoffs in the late '90s. Between 1998 and the present, Boeing worldwide employment dropped from 238,400 to the current 199,000, dipping as low as 187,000 in August 2000.

Boeing's stock has plunged since markets reopened this week. On Monday, the first regular day of trading since the Sept. 11 attacks on New York City and Washington, the stock price fell 13 percent. The price was down $2.66, or 7.4 percent, to $33.14, when trading closed Tuesday.

In the wake of the attacks, and their impact on commercial air travel, many airline carriers have warned they will be laying off at least 26,000 people — a number that could grow to 100,000. Many, including American, Continental, Delta, Northwest and United, have also scaled back their schedules by about 20 percent.

With such declines, analysts have said Boeing layoffs would be an inevitable side effect as orders for commercial aircraft are affected.

"We're all very distressed by it," Washington Gov. Gary Locke said. "We're going to do everything we can to help the workers get back on their feet."

Bofferding said he was still holding out hope that the industry would recover somewhat and the actual layoffs would not be as drastic as indicated.

"I believe this has got to be a worst-case scenario," he said.

State Sen. Margarita Prentice, D-Seattle, whose blue collar district includes many of the aerospace workers, accused the company of using the attacks to mask its real goal — corporate downsizing.

Although a drastic downturn in the aviation industry had already begun before the attacks, Mulally said the company was hoping for a soft economic landing until last week.

Still, he did not rule out the possibility that the layoffs would be reduced if the airlines can rebound.

But he denied the timing was either a downsizing subterfuge or a move to pressure Congress to pass a federal bailout package for airlines.

Because of the lead time on making airplanes, Mulally said, "We need to right size Boeing right now."

The layoffs would be among the worst in the aerospace giant's history.

About 30,000 Boeing workers lost their jobs when World War II ended in 1945. In 1971, a recession, high costs on the new 747 jumbo jet and cancellation of the planned supersonic transport caused the "Boeing Depression": the company cut its employment in the Puget Sound area from 80,400 to 37,200 in two years, prompting the famous billboard that read, "Will the last person leaving Seattle turn out the lights."