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Boeing Announces Changes For Jet Design Centers

Mon, 06/03/2013 - 9:50am
The Associated Press

EVERETT, Wash. (AP) — Boeing Co. said Friday it will create new aircraft-design centers in Washington state, South Carolina and California.

The company portrayed the new centers as a way to increase its engineering and propulsion capacity as demand rises for new aircraft and services. Boeing predicts that the world's airlines will need 34,000 new planes over the next 20 years, a potential $4.5 trillion market.

The three new design centers will compete with each other on cost and engineering know-how.

"We fully expect them all to thrive," said Boeing spokesman Doug Alder. "There's a lot of work coming."

Chicago-based Boeing also has a design center in Moscow. On Friday, it said it's considering supplementing that with one in Kiev, Ukraine.

The company said that it would move most support for planes no longer in production away from Puget Sound in Washington to Long Beach, Calif., in the next six to nine months.

The move affects work on planes such as older 737s still used by Southwest Airlines and other carriers, and 757s still used by American Airlines. The Long Beach facility already works on out-of-production McDonnell Douglas airplanes such as MD-80s.

Boeing said 300 jobs in Puget Sound would move to Southern California. The company said employees could apply for their jobs but relocation costs were not guaranteed.

In addition, the company said its commercial-airplanes unit would open a facility in South Carolina to work on improving performance of future airplanes, starting with the engine nacelles, or housing, on a future version of the 737 called the 737 MAX. Boeing currently uses an outside supplier for that work.

"With these changes, we are structuring Boeing's engineering operations to support that growth, reduce business risks and to consistently provide the products and services our customers expect," Mike Delaney, vice president of engineering for the commercial airplanes division.

Boeing and the union representing its engineers recently approved a new labor contract after months of bitter negotiations. Delaney warned the union last fall that the cost of its demands could cause the company to look elsewhere for engineering work on future airplanes.

Alder said the negotiations were not a factor in Friday's announcement.

"This has been in the works for three years, long before those negotiations even started," the Boeing spokesman said.

Shares of Boeing fell 48 cents to $100.06 in afternoon trading.

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