BOEING'S NEW THRUST; FURTHER JOB CUTS IN FUTURE.

Byline: Laura Raun Bloomberg News

Boeing Co. announced its long-rumored restructuring plan Thursday with few surprises and said it expects to start a new round of job cuts in 2000 on top of as many as 28,000 planned by the end of next year.

The job cuts come after the world's biggest airplane maker spent most of last year hiring workers to try to double production to fulfill a record backlog of plane orders. While Boeing managed to step up its output, parts and labor shortages and inefficient manufacturing processes ate into profit margins.

Boeing is taking steps to cut costs and modernize its factories at a time when management is under pressure to boost profits. The moves come after Boeing posted a loss of $178 million last year, its first annual loss in 50 years.

``I wonder whether any of the cost-cutting will be in time for the peak in their production cycle, which is expected to occur next year,'' said Robert Friedman, an analyst at Standard & Poor's Equity Group, who has a ``hold'' rating on the stock.

The Seattle-based company also said it would start making some of its updated 737 jetliners in Long Beach by the end of this year.

Boeing spokesman Larry McCracken declined to give any details on possible cuts in 2000. Last month, Boeing said it would cut 18,000 to 28,000 jobs by the end of next year from the company's total of 238,000.

Boeing shares fell $1.6875 to $37.1875.

Most of the job reductions will come in California, Washington and Missouri, Boeing said.

The company will close laboratories, plants and other facilities that will reduce its total square footage by 18 percent, compared with the 15 percent reduction it planned in March.

Boeing will consolidate its fighter airplane production in St. Louis, move the headquarters of its information and communications systems unit to Anaheim from Kent, Wash., and vacate all government-owned space in Downey.

Boeing plans to make three next-generation 737 jetliners a month at a former McDonnell Douglas plant in Long Beach by the second quarter of next year. McDonnell Douglas was acquired by Boeing last year for $16.3 billion.

That represents a fraction of Boeing's total production of 737s, the world's best-selling jetliner.

Moving production to Long Beach is intended to ease bottlenecks that emerged last year on Boeing's 737 assembly lines in Renton, Wash.

THE FACTS

Among the changes announced by The Boeing Co. for its California operations:

A 737 jetliner production line will be added at the former McDonnell Douglas plant in Long Beach, retaining about 600 workers otherwise targeted for layoffs.

The headquarters for its Information & Communications Systems business unit will move from Kent, Wash., to Anaheim.

All facilities in Downey will be closed, with the operations distributed to other Southern California facilities. The reusable space systems manufacturing will move to Palmdale, while other operations from the unit will move to Huntington Beach; management of the National Missile Defense program will move to Anaheim; and satellite programs will move to Seal Beach.

Multiple smaller laboratories will be consolidated with nearby operations.

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Photo

PHOTO (Color) Next generation and standard models of Boeing's 737 fill a Seattle-area plant earlier this year.

Associated Press