Boeing to shed 30,000 jobs

September 19, 2001 Posted: 1201 GMT

LONDON (CNN) -- Boeing, the world's biggest jet maker, plans to cut up to 30,000 jobs amid concerns last week's terrorist attack could slow orders.

The company late on Tuesday cut its forecasts for aircraft deliveries this year to just 500 as U.S. airlines cut staff and slash capacity, compared to earlier expectations of 538 deliveries.

The jobs cuts, representing 15 percent of Boeing's workforce, are expected to come from its jet-liner business by the end of 2002.

Next year, deliveries are estimated to be in the low 400s, compared to the 510 to 520 previously forecast, and the sharp downturn could continue into 2003, the company said.

Boeing's decision to slash jobs comes as U.S. airlines seek $24 billion in government aid to overcome expected losses after two hijacked planes were slammed in to the World Trade Center buildings. A third-aircraft smashed into the Pentagon in Washington and another came down in a field in Pennsylvania.

"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. "However it is critical that we take these necessary steps now to size the Commercial Airplanes business to support the difficult and uncertain environment faced by our airline customers."

Sources familiar with United Airlines told CNN on Tuesday that the airline plans to cut at least 20,000 employees, or 20 percent of its workforce. United is the latest of several major airlines to cut its workforce since the terrorist attacks.

U.S., European airlines shed workers

Continental Airlines has said it is cutting 12,000 jobs and U.S. Airways expects to lay off 11,000 employees, while in Europe Richard Branson's Virgin Atlantic has announced plans to shed 1,200 jobs.

Boeing's European rival Airbus told CNN it was "monitoring the situation and was cautiously optimistic in the medium to long term." EADS, which owns 80 percent of Airbus, rose 1.6 percent to 10.87 in late morning trading in Paris.

Airbus last month lowered its forecast of plane deliveries in 2003 to 400 from 450 amid a rapidly weakening airliner market.

European airlines that are dependent on North Atlantic routes for much of their revenue are reducing capacity to match a downturn in demand in the aftermath of the U.S. terrorist attacks and an economic slowdown.

The airline industry will meet the European Commission on Wednesday to see if the executive arm of the European Union will offer them some financial support.

British Airways (BAY), Europe's biggest airline, signaled it plans to cut more jobs and reduce capacity on North Atlantic routes. The stock declined 4 percent in London.

Shares in European aerospace and engineering companies, which supply components to the airlines industry, fell sharply. BAE Systems (BA-), Europe's biggest defence company, dropped 5.7 percent and Smiths Group (SMIN) lost 6.2 percent on Wednesday morning.

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