A strike by machinists, technical delays and litigation ate up billions of dollars in the fourth quarter, pulling aircraft manufacturer Boeing into a loss of $56 million.
Facing lower demand in the coming year, the company previously announced it would eliminate 4,500 positions in the commercial aircraft division. Along with the quarterly financial report on Jan. 28, Boeing said it will cut another 5,500 positions during 2009 from other parts of the company, including its defense division. The combined cuts amount to a 6 percent reduction of the workforce through attrition, retirements, reduction in some contract labor and layoffs.
Net income for the full year was $2.7 billion, down 34 percent from a $4.1 billion profit in 2007.
Fourth-quarter revenue declined to $12.7 billion from $17.5 billion, mostly due to a strike which has now been settled. Before the striking machinists went back to work, their action reduced commercial airplane deliveries by approximately 70 units and revenue by an estimated $4.3 billion, said the company.
The strike reduced fourth-quarter earnings by an estimated $1.2 billion. A charge for a reach-forward loss on the 747 program reduced earnings by $685 million. Another $101 million was set aside in a litigation-related reserve.
"The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs," said Chairman, President, and CEO Jim McNerney. "Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times."