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Originally published Thursday, November 20, 2008 at 12:00 AM

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Boeing past peak in new jet orders

Boeing has seen its orders peak and the number of planes in its backlog will probably decline, the chief of its commercial-airplanes division said Wednesday.

The Associated Press; Seattle Times staff contributed to this report

MINNEAPOLIS — Boeing has seen its orders peak and the number of planes in its backlog will probably decline, the chief of its commercial-airplanes division said Wednesday.

"This year will certainly be a lower orders year than the previous three, which were unbelievably strong," Boeing Commercial Airplanes CEO Executive Scott Carson told analysts at an aerospace and defense conference. "Everything that we see in the world today would suggest that next year will be down."

Carson said he didn't know how big a drop there would be but that orders would be "down slightly from what we have seen this year," as the marketplace adjusts to the economic slowdown.

Boeing, the world's No. 2 commercial-airplane maker after Airbus, has 3,734 aircraft on order. It has said a two-month Machinists strike that ended Nov. 2 would push deliveries back by about that long, although it did not offer a firm date.

Asked whether the strike would spur Boeing to consider building future airliners elsewhere, Carson said, "Clearly, being in a position where any single unit can hold you hostage in a bargaining situation because of production isn't desirable," according to a transcript of his remarks.

"We can improve our relationships with the bargaining unit, and we're on a path to do that. Or we can have an operating location somewhere else that isn't affected if we had a labor stoppage in any one region. And I think it's prudent to pursue both paths, frankly."

Carson said Boeing believes even with the slow economy, its orders are strong enough "that we have an excellent chance of building through the order cycle to the next upturn."

Layoffs in Wichita

Boeing plans to cut about 800 jobs at its operations in Wichita, Kan., next year, reducing the Integrated Defense Systems force there by 27 percent.

The layoffs, affecting salaried and hourly workers as well as managers, will begin with about 76 employees who will get 60-day layoff notices Friday, the company said Wednesday. Boeing said most of the other affected workers will be told in the first half of 2009.

It attributed the cuts to the end of some defense programs and the delay in the Air Force tanker-replacement program.

Scott Strode, vice president and general manager of Boeing Wichita, said the company is "taking steps to restructure our business in order to lower our rates and become more affordable for customers."

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In the recently concluded Boeing contract talks with the International Association of Machinists, the union rejected a company proposal to put the Wichita workers into a separate bargaining unit.

Boeing had argued that the market in Kansas required a lower wage structure and that the expense of the contract could ultimately cost jobs in Wichita.

Seattle Times business staff

Copyright © 2008 The Seattle Times Company

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