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Thu 19 Nov 2009 12:50 PM

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EXCLUSIVE: Boeing chairman sees more job cuts in 2010

Aerospace giant confirms fresh round of job cuts planned amid aviation downturn.

Boeing, one of the world’s largest aerospace companies, has confirmed a fresh round of job cuts will happen next year, in addition to the 10,000 redundancies already announced by the firm.

Jim McNerney, chairman and chief executive, said the aerospace giant had not finalised a figure, but said it was unlikely to match the 10,000 cull announced this year.

“We’ve talked about the 10,000 and then maybe some more,” he told Arabian Business. “Not in the magnitude of another 10,000, but there will be a continuation of the trend lines through to the end of the year.”

Boeing has slashed 8,000 jobs this year from its 150,000-strong workforce, and expects to lose another 2,000 staff in the first quarter of 2010, he said.

“So for 8,000 now, we’ll get to 10,000 in the first part of 2010 and then there will be more.”

The job cuts are partly due to the downsizing of military programmes, he said, following the Obama administration’s decision to trim defense spending.

“Whenever a new administration comes in there are different priorities on programmes, and we’ve had some shifting things on people, we’ve had to let some go and hire others,” McNerney said.

“Some more will come out, as a result of adjusting to new programme priorities, as well as some efficiencies as we respond to markets that have come down.”

Boeing’s defence business accounts for about half of its annual sales. The US military is the firm’s largest customer.

Boeing last month reported a third-quarter net loss of $1.6bn as it booked charges on development costs for the long-delayed 787 Dreamliner and its 747-8 cargo plane. The 787, which has an all-composite fuselage, is the fastest-selling pre-delivery aircraft on record, according to McNerney. The company has more than $15bn in orders from Gulf airlines alone, but has come under increasing pressure amid mounting delays to the delivery schedule. The aircraft is now two-and-a-half years behind schedule.

Chief executive of Qatar Airways Akbar al Baker criticised the delays this summer, and threatened to walk away from the airline’s 30-aircraft order.

“In terms of the Qatar question, listen, they are unhappy with the delay we’ve imposed upon them because of our developmental problems,” McNerney said. “We’re working with them and I have confidence we’ll find a way together with them.”

The 787 is on track to complete its maiden flight this year, he added.

“Things are moving along. We are meeting all of our milestones and that gives us confidence.”

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