Published March 2004

Layoffs possible for 767 tanker program

By Bryan Corliss
Herald Business Writer

As many as 50 Everett-area workers could lose their jobs and 450 others were reassigned Feb. 23 following Boeing’s decision to slow down development work on 767 refueling tankers, a company spokeswoman said.

The slowdown on tankers for the U.S. Air Force won’t affect production of commercial 767s in Everett, the spokeswoman said. But it will mean delays in plans to deliver the first KC-767 tankers to the Air Force in 2006.

The decision is the result of a Pentagon freeze on the program to allow investigators time to probe allegations of misconduct involving Boeing and a former Defense Department official who negotiated the deal.

Boeing chief executive Harry Stonecipher said he supports the investigations, which are expected to stretch into May.

“I remain convinced that these reviews represent the best path toward restoring full confidence in the program and validating the need to get new tankers into the Air Force inventory as quickly as possible,” he told employees in a Feb. 20 memo.

But union leaders said they are frustrated that Boeing employees are losing jobs as a result of the ethics scandals involving the company’s top management.

“Our members did not make the mistakes to cause this delay, and they should not have to pay the price,” said Machinists union district president Mark Blondin.

The many delays in the program are wearing on workers, said Bill Dugovich, a spokesman for the Society of Professional Engineering Employees in Aerospace. The deal first got congressional approval in December 2001.

“It’s getting to the point where you have to wonder how much is being spent to re-evaluate this thing time and time again,” Dugovich said. “It’s a good plane. We certainly need the jobs. It’s time to make the decision and build the thing.”

Along with the Everett job shifts, Boeing will reassign 150 workers now doing tanker work in Wichita, Kan., the company said. Another 100 contract employees in Wichita will be laid off.

The announcement comes as Pentagon investigators continue to examine allegations of ethical misconduct in the negotiations that led to the 100-jet deal between Boeing and the Air Force. Boeing fired former Chief Financial Officer Mike Sears for trying to cover up his role in offering Pentagon weapons buyer Darleen Druyan a Boeing job while she was negotiating the tanker deal. Druyan also was fired from her job in Boeing’s defense unit.

While that goes on, a separate review board is looking at other options for the tanker fleet — including renovating the existing fleet of KC-135s rather than replacing them — while a third studies Pentagon procurement procedures. While the investigations are under way, Air Force officials are barred from talking to Boeing about the tankers, and that’s what’s behind the decision to slow development work, Stonecipher said in his memo.

“Important and detailed day-to-day dialogue with our customer is necessary to refine program requirements,” he told employees.

And if Boeing doesn’t know exactly what the Air Force wants on certain specific questions, continuing development at the current pace “would not be prudent” for either the service or the company.

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