Boeing recession? The company will decide in the next months whether to cut planned 777 jet and production increase of 787 Dreamliner

Boeing will decide in the next couple of months whether to further cut back planned production of its large 777 jet and may also cancel a planned production increase for the 787 Dreamliner. Boeing Chief Financial Officer Greg Smith said that the dearth of widebody-jet sales is the cause of this probable cutting. Boeing could cut the 747 jumbo-jet assembly line as well, the latest wavering on production means Boeing’s Everett plant could lose substantial work that would trigger significant job cuts.

Boeing has already lost more than 3500 jobs in Washington state so far this year, with more to come due to previously announced cost-cutting efforts, and and a dip in Boeing work would also hit many suppliers to the jet maker around Everett.




Boeing has already committed to slowing production of the current 777 from today’s rate of 8.3 jets per month — that’s 100 per year — down to 7 jets per month in 2017. The rate will decrease further to 5.5 jets per month during the transition to the new model 777X in 2018. It is unclear if new orders will arrive in time to match those planned production rates. Boeing has said it needs to sell 40 to 60 jets per year to fill all the open 777 delivery slots between now and the end of the decade. But so far this year, it has booked just eight net new orders. In the first five years of sales, Boeing sold 700 Dreamliners. In the five and a half years since, it has sold 400 more. So far this year, Boeing has added just 19 net new orders for the jet. This could involve  the new 777 model in development, the 777X, it could have not enough sales when it enters service in 2020. Boeing, which has 306 firm orders for that new jet, but has booked no new orders within the past year. It is not the first time in the Boing’s history.  Between 1967 and April 1971, Boeing employment fell from 100,800 to 36,690. It took years to recover. The causes included cancelation of the supersonic transport (SST), slow sales of the new 747 and, by early 1973, the OPEC boycott and “energy crisis.” Boeing has wide swings — in 1990, it was more than 114000; in the fall of 1995 down to 57000; by 1998 back up to 113000; down below 61000 in 2004; 97000 in March 2013, and 91700 in May. This business has plenty of dips and slowdowns.

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