Boeing to end 757 production

Boeing will cease production of its single-aisle 757 jet late next year, after more than 1,000 airplanes sold in 25 years on the market.

But Boeing announced no new job cuts as a result of yesterday's news.

And Alan Mulally, chief executive of Boeing Commercial Airplanes, said the company has no plans to vacate its Renton manufacturing facility, even though it will be down to one 737 assembly line after the 757 is gone.

"The 737 line is going to keep operating in Renton with ever-improving quality and productivity," Mulally said.

Asked to be more specific, Mulally replied: "As long as the world wants 737s."

Mulally's statement was Boeing's strongest rejection yet of persistent rumors the company will eventually move 737 production to its massive Everett plant, where it makes larger planes such as the 747 and 777.

Boeing has 803 unfilled orders for 737s, according to its Web site. Even at its pre-Sept. 11, 2001, peak-production rate of 28 planes per month, that translates to years of work.

Currently, Boeing is building about 16 737s per month due to the global slump in air travel.

Boeing will take a $184 million charge against its third-quarter earnings to cover the costs of the 757 shutdown, the company said.

That news will come as no surprise to Wall Street, as Boeing Chief Financial Officer Mike Sears said in July the company would take a charge of about $200 million if it decided to close the 757 line.

Few orders since attacks

The end of the 757 program had been anticipated for months, as demand for the once-popular airplane has virtually disappeared.

The 757 had been an enormously good seller with major U.S. airlines. American, Delta, United, Continental and Northwest airlines collectively purchased 462 of the single-aisle airplanes, nearly 50 percent of all 757s.

But as a result of dependence on those airlines, the 757 has suffered more than any other Boeing model since the Sept. 11 terrorist attacks.

None of the U.S. majors has ordered a 757 since July 2001. The 757 program received just seven orders after the attacks, including a final five-plane order from Shanghai Airlines last month.

Shifting route systems and the introduction of new, more-efficient airplanes also squeezed the 757 market.

Randy Baseler, vice president of marketing for Boeing Commercial Airplanes, said in an interview last week that until the mid-1990s, the 757 was the only single-aisle jet with the ability to go coast-to-coast in the United States.

Next-generation 737s now have the same capability, and they offer airlines a range of seating options.

Previously, "airlines that wanted to travel across the United States, if they wanted a 150-seat airplane, they got a 200-seater," Baseler said.

"It's not that there's a problem with the airplane. Its space has been encroached upon."

Mulally made the same point yesterday.

"What the airlines are deciding with this decision — and it absolutely is the airlines' decision — is that with the technology that we have incorporated into the 737 next-generation, that that airplane is more valuable to them going forward," he said. "It has all the capabilities, the operating economics, plus it has a wide-ranging family."

Labor leaders met the news with resignation, but used it as an opportunity to push Congress to approve an order for 100 767 refueling tankers and to urge Boeing to build its proposed 7E7 in Washington.

"It's extremely disappointing to see what has been such a good product for the company slip away. But it's not unexpected," said Bill Dugovich, spokesman for the Society of Professional Engineering Employees in Aerospace. "This demise makes the 737 that much more critical."

Machinists union spokeswoman Connie Kelliher said, "It's disappointing. But with the backlog dwindling and no additional sales, it's understandable. Our hope is that there will be rate increases on the other lines that can absorb these people so there won't be job losses.

"It's one more reason it's critical that we get the 767 tanker deal," she added. "The timing might just give (the 757 workers) a place to land."

State political leaders also used the occasion to press Boeing to build the 7E7 in the state.

"With the exit of one generation of airplanes, I hope Boeing remembers its talented and qualified workers in Washington state as it prepares to build its next generation of planes," said Sen. Maria Cantwell, D-Wash.

"I'm hopeful any displaced workers might be able to find future jobs in the production of other Boeing jets, like the 737 and the 7E7, here in Washington state," said state Sen. Stephen Johnson, R-Kent, whose district includes Renton. "We need to continue our fight to ensure any future Boeing jetliners are assembled in Washington — especially the 7E7 Dreamliner."

Fears over Renton plant

Renton workers knew the 757 was nearing the end of its life. Their concern is with the fate of the rest of the final assembly plant, which Boeing is in the midst of renovating so it can move 737 engineers closer to the line.

"It's nothing people didn't already know," one Renton machinist said. Worries about a 737 move to Everett, he said, are "the major thing people are talking about. The 757 is no surprise."

Discussing the outlook for jobs, Mulally said it is too early to predict the precise impact of the 757 closure, noting that some employees will shift to other airplane programs, and production will continue for another year.

He reiterated Boeing's long-standing position that demand for airplanes will dictate jobs.

"We will set the employment (of the commercial-airplanes division) based on the total production of Boeing airplanes," Mulally said.

Mulally looked strained as he outlined the news, but his expression brightened as he spoke of his pride in the 757 and delivered a eulogy to the program.

"I was on the design team for the 757 and the 767 ... (which) were world class and industry leading," he said, citing details such as the industry's first flat-panel displays and the first flight-management computer.

"The 757 has been a terrific performer. We're very proud of it. Everyone that worked on it should feel tremendous pride to have created over 1,000 of these airplanes."

David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com

Dominic Gates: 206-464-2963 or dgates@seattletimes.com