BOEING WORK BEING MOVED SPACE CREW OFF TO TEXAS.

Byline: Evan Pondel Staff Writer

CANOGA PARK - Nearly 200 Boeing Co. employees who work on the International Space Station project in Canoga Park will be moved to Houston as part of a transfer of more than 1,100 engineering jobs from Southern California, the company announced Tuesday.

The 200 jobs represent a small part of the Canoga Park facility's 4,500 employees, most of whom will remain.

``This will have no effect on the Canoga Park facility as a whole,'' said Dan Beck, a spokesman for Boeing.

At Boeing's Huntington Beach site, about 14 percent, or 900 to 1,000 workers, will move to Houston or Cape Canaveral, Fla.

With a contract just over $9 billion from the National Aeronautics and Space Administration for the space station program, Boeing said its decision to uproot its engineers stems from the company's need to consolidate costs.

NASA also faces budget woes, including a $4.7 billion overrun on the development of the space station. NASA is exploring the possibility of postponing any shuttle modifications until the fiscal year beginning Oct. 1, 2005.

Assembly of the space station began with the first piece launched in 1998. In total, 100 elements will be shuttled up during 88 space flights - 37 of them aboard U.S. spacecraft and 51 aboard Russian vessels.

When Mike Mott, vice president and general manager for Boeing's Human Space Flight and Exploration division, was asked during Tuesday's conference call how workers responded to the news, he said he received a mixed bag of reactions.

``We got it all over the map ... some of it was very positive ... some were not pleased,'' he said. ``I think my popularity has gone down slightly here on the Huntington Beach campus.

Boeing plans to wrap up the move by Nov. 1; however, the Seattle-based aerospace juggernaut could experience a little turbulence as Texas and Florida vie for the engineers.

The company said Florida is putting together an incentive package and there might be a bidding war between Florida and Texas.

Instead of affixing a dollar amount to the move's cost, Mott told reporters, ``I'm a real wimp on giving you specifics.''

However, he did say it will cost within ``the millions.''

``The downside of not making a move could have put our shuttle contract at risk,'' Mott said.

Though it's flaps down for those engineers who aren't ready to make the move, Boeing's ability to stay financially aloft is attributed to decisions like the one announced Tuesday, said Paul Nisbet, an analyst with JSA Research.

In Boeing's second quarter, the company posted a 35 percent increase in earnings, flying past analysts' expectations.

Boeing reported net earnings of $840 million, or 99 cents per share, compared with a projected $620 million, or 71 cents per share.

In its final earnings report before the company moves to its new corporate headquarters to Chicago in September, Boeing said it expects to deliver about 538 commercial aircraft this year, which could increase revenue for the year by $1 billion, to $58 million.

``And when you have 1,500 planes in backlog, you can juggle deliveries around without cutting production rates,'' Nisbet said. ``We also feel the stock is undervalued ... it's sort of hanging out there, not reflecting the true fundamentals of the company.''

And while the economy continues to eat away at many publicly traded companies, Peter Jacobs, an analyst with Wells Fargo Van Kasper, said Boeing remains in an outstanding position right now and hasn't felt the economic malaise.

Jacobs said 40 percent of the company's revenues are generated in defense and space markets, while 60 percent is related to airplanes.

``However, the long lead order times could eventually have an impact on Boeing in the future,'` Jacobs said.

Boeing rose $1.13, or 1.97 percent, Tuesday to close at $58.53

Staff Writer Jim Skeen contributed to this report.