Boeing to make 777s faster to meet demand Additional workers are being hired

August 28, 1996|By BLOOMBERG BUSINESS NEWS

SEATTLE -- Boeing Co. said yesterday that it will speed output of its new 777 jetliner and hire another 5,000 workers to meet surging demand for all its aircraft.

Boeing had planned to add 8,200 workers this year. Now it will add 13,200 in its first round of hiring in seven years, bringing its total employment to 118,350.

The world's largest commercial aircraft maker also said that by July 1997, monthly production of the twin-engine 777 will rise to seven per month from five.

Though Boeing's business has been booming, "the magnitude and timing of the increase [in 777 output] were both a surprise," because the company had production problems this year, said Paul Nisbet, an aerospace analyst at JSA Research in Newport, R.I.

Nisbet said he raised his earnings estimates for Boeing after hearing that the company planned to make 777s quicker. He expects the company to earn $5.75 a share in 1997, up from a previous estimate of $5.60. Nisbet expects Boeing to earn $2.85 a share in 1996, excluding any one-time gains or losses. Analysts with Bear Stearns & Co. and Lehman Brothers Inc. also raised their earnings estimates.

Shares in Boeing rose 87 1/2 cents to $91.25 yesterday.

Airlines worldwide are using surging profits to replace old aircraft and add new ones. Boeing has booked 333 orders for new jetliners so far this year, compared with 346 for all of last year and just 120 in 1994.

The production increase is the fourth that Boeing has announced since December. Production of Boeing's 777, 747 and smaller 737 models is poised to double next year.

Boosting production has been a challenge for Boeing. For six weeks this summer, workers on the 777 wing-production line were forced to work 10-hour days and two out of every three weekends to end delivery delays. The mandatory overtime ended Aug. 19, said Boeing spokesman Peter Conte.

A 37-day strike at Boeing's Winnipeg, Manitoba, plant created parts shortages that had managers scrambling to keep production on track. The strike ended this month.

The 777 is proving to be one of Boeing's most popular planes. Singapore Airlines Ltd. ordered 34 of the twin-engine, wide-body planes in November, and took options for 43 more. Earlier this month, United Airlines ordered two 777s as part of a $2.5 billion order for a variety of Boeing planes.

As of July 31, Boeing had an order backlog of 245 777s. The company's total backlog was 1,143 planes.

The company eliminated about 62,000 jobs between 1989 and 1995 as airlines suffered huge losses and stopped buying planes. Many of those jobs belonged to members of the International Association of Machinists and Aerospace Workers, which represents about a third of Boeing's employees.

"All our people are getting their jobs back," said Connie Kelliher, spokeswoman for IAM District Lodge 751, which represents Boeing's hourly employees in the Seattle area.

Kelliher said Boeing has rehired about 5,000 Seattle-area union members so far this year, leaving 1,900 eligible to be rehired.

About 9,800 of Boeing's new employees will work at the company's Washington state facilities, while Boeing's Wichita, Kan., facility will gain roughly 3,300 workers.

Pub Date: 8/28/96

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