Report: Boeing 737 Delay

Boeing delays start of 737 production in Long Beach

The opening of a Boeing 737 production line in Long Beach, Calif., has been postponed while corporate executives reconsider the move, the Seattle Post-Intelligencer reported Tuesday.

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Managers told workers at the former McDonnell Douglas plant in Long Beach Monday that any 737 production will begin early next year, possibly in February, rather than this month as previously announced.
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Two months ago Boeing had announced it planned to assemble three to five 737s per month in Long Beach, employing 600 or more people in Boeing's Douglas Products Division.

The newspaper also quoted sources who asked not to be identified as saying the question of whether to proceed with the plan is being revisited by Alan Mulally, who replaced Ronald B. Woodard as head of Boeing Commercial Air Group in a corporate shakeup Sept. 1.

Reconsideration was described as part of Mulally's overall review of ways to boost profits.

The company remains behind schedule in meeting its goal of delivering 550 commercial planes this year, and executives reportedly fear a Long Beach startup could detract from that effort.

Failure to meet the delivery target could prevent Boeing from reaching another goal, earnings of at least $1 a share this year following a loss last year that was the company's first in half a century.

T. Craig Martin, a Boeing spokesman, said the delay in startup of 737 production in Long Beach was not a sign that the company might reverse its decision altogether.

"When you get a management change as profound as that which occurred in the Boeing Commercial Airplane Group, everything is subject to re-examination," Martin told the P-I Monday"We have to look at everything Long Beach is part of that but this postponement should not raise a red flag."

Boeing executives reached agreement with Machinists union leaders in August for production of as many as five 737s a month at the factory in Long Beach where the Boeing 717, MD-11, MD-80, and MD-90 are assembled. Production of all three MD models is being discontinued as of early 2000.

Under the agreement, no Machinists jobs in Renton, Wash., would be lost from production of Boeing Business Jets, a cargo model and a stretched 737 in Long Beach through next September.

The former McDonnell Douglas workers in Long Beach are represented by the United Aerospace Workers, a branch of the United Auto Workers.