Published October 2001

Boeing plans massive layoffs in wake of attacks

By Bryan Corliss
Herald Economy Writer

Between 20 and 30 percent of the employees at each Boeing Co. commercial jet plant will lose their jobs during coming layoffs, Commercial Airplanes President and Chief Executive Alan Mulally said late last month.

Boeing has not developed a specific layoff plan, a spokesman said. But the implication is that between 5,000 and 7,500 Everett jobs will go by the end of 2002.

They’ll probably stay gone for a year or two, Mulally said, until the world’s airlines recover from financial wounds inflicted by the Sept. 11 terrorist attacks on New York City and Washington, D.C.

Elected officials have pledged government help in assisting the workers, and economists warned that the layoffs will hurt an already-struggling state and regional economy.

“Our economy’s more diverse than ever before, but this is still a significant job loss,” Gov. Gary Locke said.

The cuts at Boeing also will affect the companies that supply it with parts, Mulally said, projecting they may be faced with layoffs as well.

Boeing brass met Sept. 19 to figure out a plan for how it will shed as many as 30,000 jobs from its Commercial Airplanes and Shared Services groups, spokesman Tom Ryan said.

“They’ve been agonizing over this,” he said. “It’s not easy. We’re talking about people’s livelihoods here.”

Union contracts say the company must give workers 60 days’ notice before a layoff. The Society of Professional Engineering Employees in Aerospace said it typically takes Boeing about a month after announcing layoffs to start issuing notices to affected employees.

Mulally called the decision to order layoffs “absolutely gut-wrenching.” He flatly denied assertions made by some — including Everett machinist David Clay — that the company was using the terror attack as a pretext for previously planned job cuts.

“Absolutely not,” he said. “From a business sense, that doesn’t make any sense at all.”

“We have to deal with reality,” Mulally said. And the reality is that air travel has plummeted since the attacks, and U.S. airlines can’t afford to keep the planes they already have flying, let alone buy new ones.

Locke said the state will extend limits on unemployment insurance payments to displaced workers, so that they won’t run out of cash so fast.

“We’re going to do everything we can for affected Boeing workers and their families,” Locke said.

That will include job training and help for the workers to find new jobs, he said.

He said he also is working with Washington’s congressional delegation to urge support for an airline bailout, and for assigning sky marshals to flights, a move Locke said will boost public confidence in the safety of air travel.

Union officials also pledged support for their members.

“Our focus is on the welfare of the employees,” said Charles Bofferding, the executive director of the Society of Professional Engineering Employees in Aerospace. “We will do everything we can to ensure employees are taken care of and treated fairly.”

The union will ask Boeing to consider alternatives to layoffs, like job sharing, voluntary retirement or transfer of workers.

SPEEA President Craig Buckham and Machinists union President Mark Blondin said they would like to see a portion of the billions of dollars of airline industry bailout go to help Boeing.

The government bailout, aimed at keeping the airlines solvent through the crisis, would help Boeing indirectly, Mulally said. But Boeing is not looking for any direct support from the government.

“If the government can maintain (so that) the airlines stay solvent, that’s the best thing for Boeing,” he said.

What does all this mean for Snohomish County’s economy?

A lot will depend on the timing of the layoffs, said Donna Thompson, a state labor economist based in Everett. And the transfer of jobs related to Boeing’s Sonic Cruiser — Mulally said that work will continue — will mitigate the effects some.

Clearly there will be a significant drop in aerospace employment in the county, which accounted for 31,700 jobs in August, she said. But otherwise, “the crystal ball is really cloudy. Everything is happening so fast.”

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