Boeing's military division unaffected by layoff plans

Thursday, September 20, 2001

ST. LOUIS -- Boeing Co.'s plans to lay off as many as 30,000 commercial airplane workers will not affect staffing in the St. Louis-based military arm of the nation's largest aerospace company, that division's chief said Wednesday.

Jerry Daniels said the Military Aircraft and Missile Systems unit has about 15,000 St. Louis-area workers, accounting for about one-third of the staffing in the division that designs, builds and supports military weaponry, including fighter jets, bombers, rotorcraft, missiles and munitions.

Daniels said his division's sites in Wichita, Kan.; Arizona, California, Pennsylvania, Texas and Washington state also would be largely unaffected by Boeing's job cuts the company considered a ripple effect of the Sept. 11 terrorist attacks in New York and Washington.

Still, Boeing's planned layoffs -- expected by next year's end -- puts "an extra burden" on its defense side "to perform better than we've ever performed for the financial health of our company," said Daniels, the defense unit's president and chief executive.

Boeing has gotten no word yet from the Pentagon on whether the company should ramp up production of its defense products as the nation pledges a military response to last week's attacks, Daniels said. Foreign countries supplied by Boeing's defense arm also have not voiced immediate interest in beefing up their arsenals since the attacks, Daniels said.

Crucial contract

Boeing could learn next month whether it lands what it considers a crucial $200 billion Defense Department contract to build revolutionary warplanes called Joint Strike Fighters, which combine supersonic speeds and the ability to hover with radar-baffling stealth technology.

Daniels said Boeing submitted its bid Tuesday, hoping to edge rival Lockheed Martin Corp. to build the warplanes that will serve the U.S. Navy, Air Force and Marines, as well as Britain's Royal Navy.

Daniels said the Pentagon has not said whether last week's terrorist strikes could push back the decision on who builds the Joint Strike Fighter, which Daniels said "has always been critical to the company. In light of what's taking place now, it's even more critical."

While cautioning that failing to land the contract won't put Boeing out of business, he said "it's absolutely crucial we win that program." If it does, the warplanes would be built in St. Louis and mean 3,000 to 5,000 potential jobs locally, Daniels said.

"Clearly, there is a huge employment impact," he said.

In announcing the layoffs late Tuesday, Boeing conceded that it will not be able to immediately recover from the damage the terrorist strikes have done to the aviation industry. Boeing said it likely will start handing out pink slips within weeks, with layoffs to begin about two months later.

93,000 workers

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

Given the attacks' 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 also have scaled back their schedules by about 20 percent -- declines that analysts say make the Boeing layoffs an inevitable side effect as orders for commercial aircraft are affected.

Boeing's "problems are very, very minor when compared to ... those touched directly by those attacks," Daniels told reporters at his division's base near Lambert Airport.

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