Posted on: Saturday, October 20, 2001

Boeing to decide soon on 717 jetliner production

By Allison Linn
Associated Press

SEATTLE — Boeing Co. expects to decide by the end of the year whether to keep building its money-losing 717 passenger jet, the president and CEO of Boeing's jetliner division said yesterday.

Alan Mulally, head of Boeing Commercial Airplanes, also told a news conference that airliner production rates would be reduced to 50 percent of current levels by the middle of next year.

The 717, a 100-passenger plane and the smallest commercial jet Boeing makes, is assembled at the company's Long Beach, Calif., plant. Boeing, which inherited the 717 program when it bought rival McDonnell Douglas in 1997, produces four of the planes a month.

Mulally said Boeing is studying the future of the Long Beach factory as part of a companywide examination of ways to consolidate and save money. The 717 is the only commercial aircraft currently built at Long Beach, which also performs some aircraft services and subassembly work.

Mulally would not say what the Chicago-based Boeing's plans are for that factory or for any other Boeing facility.

"Everything is being considered" for possible consolidation, he said.

In releasing its third-quarter earnings Thursday, Boeing slashed its estimates for 2002 revenues and jet deliveries, and said even fewer airliners might be delivered in 2003.

The company said it expects to deliver 522 planes this year — 22 more than it estimated immediately after the Sept. 11 terrorist attacks — but only 350 to 400 planes in 2002 and probably fewer in 2003.

As the world's largest commercial aircraft maker, Boeing has suffered from the drastic post-Sept. 11 decline in air travel along with its biggest customers, the airlines. Boeing is laying off 12,000 workers by year's end and as many as 18,000 more next year.

Boeing currently produces about 43 airplanes a month. Mulally said the company would gradually decrease production to half that rate by the middle of next year.