Update: Boeing to End Production of Long Beach-Based 717 Jet

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After years of sluggish sales, Boeing Co. has finally pulled the plug on its Long Beach-based 717 commercial jet program.


Boeing’s decision, announced Friday, underscores the sluggish industry-wide market for the 100-seat class program, where the company’s production has dropped to only one plane per month, or about a third its originally anticipated rate.


It’s also the end of an era. The 717 program was launched in October 1995 as the former McDonnell Douglas Corp.’s MD-95. That company’s sale to Seattle-based Boeing two years later left Los Angeles without any major locally owned aircraft manufacturers for the first time in more than half a century. Boeing is now headquartered in Chicago.


The 717’s future was thrown into doubt with McDonnell Douglas’ sale, as the aircraft competed with Boeing’s own short- to medium-distance workhorse, the 737. Boeing promised to support the plane, but it managed to sell only 155 of them.


“People were disappointed as many of the employees have been here since the program’s inception,” said Cynthia Taylor, a Boeing spokeswoman. “But the employees understand the market reality.”


Company officials would not say exactly how many employees were still working on 717 production lines. There are 2,500 employees working on either the 717 or the company’s Commercial Aviation Services unit, which supports all in-service aircraft.


In recent years, there had already been several hundred layoffs on the 717 program. Many of the remaining workers will stay on through at least the end of the year, because the company still has 18 orders it must fill through May 2006, Taylor said.


After the production line is shuttered, Boeing will attempt to place 717 workers at other Boeing operations throughout Southern California, where a total of 35,000 people already work, she said.


“We’re reasonably confident we can place the majority with other Boeing programs within the region,” she said.


Boeing will take a pretax charge of about $340 million related to ending production of the 717. An additional $45 million of expenses associated with the shutdown are expected for 2005 through 2007, Boeing said.

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