BY SCOTT BREEN
SEATTLE - Boeing has announced that it is eliminating 8,200 more jobs by the year 2000. The Boeing News outlined a plan "to streamline facilities, focus manufacturing and assembly operations, and eliminate redundant laboratories." These job losses are in addition to the company's intention to reduce commercial airplane employment by 12,000 people in the second half of 1998. Those layoffs were announced Dec. 16, 1997.

The Boeing Company, the largest aerospace company in the world, employs some 239,000 people nationwide and about 118,000 in the commercial airplane division.

According to Boeing, they will close down 15 percent of its factory space around the country, lowering its costs by some $1 billion. Boeing management says these reductions will help "improve productivity and reduce costs." In effect, they are part of their plans to speed up production and increase exploitation of its labor in order to resolve their current profit crisis.

At the same time it's cutting jobs, Boeing continues to rev up its production of commercial airliners to their highest ever. Over the last two years as it hired and recalled over 32,000 workers - about a 30 percent increase - it more than doubled its production rates for its jetliners. Boeing is again boosting production to 43 planes a month, hoping to up it to 48 a month by midyear. The aerospace giant plans to double production of the popular Boeing 737 in the second quarter of 1998 to 14 per month, and then to 21 per month late in 1998. It is projecting delivery of 550 airplanes this year; in 1997, it delivered 374. That's almost a 50 percent increase in production.

Boeing plans to cancel MD80 and MD90 jetliner production at its Long Beach facilities, eliminating 3,000 jobs there. At the same time it will slash 800 jobs in a Toronto, Canada plant that does subcontracting work for MD 80/90 airplanes. Boeing will cut 900 jobs by terminating its commercial helicopter division in Philadelphia. And it will combine and consolidate various certification and test laboratories and facilities around the country, eventually closing several of them, which will result in the elimination of more jobs.

Production delays cause concern
This plan is the another step in the so-called rationalization of production in the "new" Boeing Company after its mergers with McDonnell-Douglas and Rockwell's aerospace and defense operations last year. One immediate result of these mergers was to make Boeing the largest manufacturer of military jets in the world and the second- largest military contractor in the United States, closely behind Lockheed-Martin. Phil Condit, Boeing's chairman and chief executive, said, "We are strategically realigning the use of our facilities to provide better value to our customers and shareholders."

Boeing's production problems have cut into profits, greatly concerning its owners and Wall Street. Last year Boeing suffered its first profit loss in 50 years, stunning stockholders and Wall Street traders. It missed airplane deliveries to airline customers, had massive parts shortages and production snarls, actually shutting down the 747 and 737 production lines for a whole month in 1997. Its Next- Generation 737 airplane suffered a $700 million loss last year when Boeing was forced to make extensive changes and retrofit its planes to correct flight problems and achieve government certification. Boeing forced massive amounts of overtime on its workforce, and workers suffered increased accidents and injuries on the job.

These production problems resulted in $2.6 billion losses against earnings in 1997, creating a profit loss of $178 million last year. In 1996, Boeing posted a profit of $1.8 billion. The company's stock prices dropped, falling 20 percent over a few days in October last year, on news of its production problems and write-offs. Its stock price today is still below its high point last summer. Some Wall Street analysts and brokerage houses have sounded the alarm that Boeing management might not be able to turn around its situation. When Boeing announced it will reduce its expected pretax first quarter profit of $400-450 million by $350 million to cover continuing losses on its 737 aircraft, Standard and Poor placed its long-term ratings on Boeing on a credit watch. In response to these production and profit problems, Boeing's board of directors froze top managers' salaries and cut their bonuses for 1997.

Recent articles in the financial press have decried Boeing's inefficiency and called for accelerating attacks on the workforce. Fortune magazine, for example, published a major article on January 12 this year entitled: "Boeing's Big Problem." Their solution to its profitability crisis calls for Boeing to "complete the factory-floor restructuring it so obviously needs." The article quotes Ron Woodard, president of Boeing's commercial aircraft group, explaining, "We've pretty much run out of technological evolutions on our products." "With no new airplanes on its drawing boards," the article continues, "Boeing has only one place left to look for competitive advantage - the factory floor."

Despite public pronouncements that Boeing's production problems are behind it, the company has been forced to acknowledge their continued difficulties in making scheduled deliveries and meeting customer demands. Recently, front page articles in the Seattle newspapers reported on a private meeting Boeing's top executives had with "frustrated" European airline executives this month. According to the Seattle Times, the European customers - Air Berline and four other airlines - complained about production delays and errors, damaged aircraft and eroding customer support." Steve Hazy, president of International Lease Finance Corporation (ILFC) publicly criticized Boeing for delivery delays as "by far the worst situation we've ever seen." ILFC has more than 200 Boeing planes on order.

Sharp competition with Airbus
At the heart of Boeing's profit crisis is its increasingly fierce, price-cutting competition with the European consortium Airbus. Boeing has about a 70 percent share of the airplane market, and Airbus the remaining 30 percent. Last year Airbus boosted its sales by 30 percent, but it posted a 61 percent decline in profits for 1997. According to industry analysts, the competition for orders has driven commercial aircraft prices down 20 percent in the past two years, squeezing both manufacturers' profit margins.

It is in this context that Boeing has been carrying out various attacks on its workforce and unions in order to bolster its sagging profit rates. Speedup will continue, as Boeing strives to increase its production rates and lower its costs. Workers will be pushed to work harder and produce more in a shorter period of time in order to lower its overtime costs and avoid hiring more workers.

CEO Condit defends actions like the job cuts to "help keep the company competitive for new business opportunities." Harry Stonecipher, the new president of Boeing, is more straightforward in explaining the interests behind such moves. He describes himself as "profitability driven." Stonecipher told the Seattle Rotary Club recently that for years he has defended the widely viewed perception that he is only interested in making money. "After a while I just said, you're right, I am."

Stonecipher was the chief executive officer of McDonnell- Douglas when it forced a strike by the Machinists union at its St. Louis plant in 1996. After helping to organize the merger of Boeing and McDonnell Douglas, he became the president of aerospace giant.

In his speech to the Rotarians, Stonecipher bemoaned Boeing's financial results that have "ranged from a little better than average in recent years to absolutely dismal in 1997." He declared "That's something we can and we will fix."

He told the businessmen that "the biggest threat to the Boeing Company is failure to execute inside." The Boeing president ended up his speech by outlining what his role in the company was today: "I can stop a lot of spears for Condit and I can also throw a lot for him."

The intended victims of those "spears" are Boeing's workers. However, there are already signs of collective resistance developing. On March 25, 250 employees in Seattle protested Boeing's new benefits program, which the company is unilaterally imposing on more than 100,000 salaried, nonunion employees. These benefits will mean cuts in medical and retiree benefits. Another rally of several hundred workers protested the cuts on April 8. This time the event was during the workers' lunch hour and was held on Boeing's airfield tarmac. It was jointly organized by SPEEA (Seattle Professional Engineering Employees Association) and International Association of Machinists and Aerospace Workers (IAM).

Additionally, 41 Boeing workers - 40 of them Black - have filed an $82 million lawsuit accusing the aerospace giant of race discrimination in hiring, promotions, and work conditions.

Many Boeing production workers organized by the IAM in the Seattle plants are already discussing how to prepare for a contract battle with Boeing in 1999, when the current contract expires. In 1995 unionists carried out a 69-day strike that pushed the company back. All this indicates that workers here will find ways to resist Boeing's collision course with its workers.

Scott Breen is a member of IAM Local Lodge 751A at Boeing in Everett, Washington.  
 
 
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