Washington: Aviation giant Boeing has said it was cutting production of its 777 aircraft to five a month from seven due to slackening demand, in a move that will impact jobs.
The announcement followed the manufacturer’s clinching of a USD 17 billion dollar deal on Sunday to sell 80 jetliners, including the 777, to Iran, the first such agreement between a major US company and the Islamic Republic.
In a message sent yesterday to all employees working on the 777, Vice President and General Manager Elizabeth Lund said orders for the aircraft had slowed in some regions.
While the agreement with Iran was “good news,” with deliveries to Iran Air expected to start in 2018, the decision to slow production had already factored in the deal, she said.
“The 777 program does expect some impact on employment next year,” Lund said in the message. “While the exact number of affected positions has not been determined, we will do our best to lessen the impact.”
Boeing in October reported that commercial deliveries had slowed in the third quarter, with 188 planes delivered, down 5.5 per cent from the same period of last year. The company delivered 22 of the 777 planes, five fewer than during the same quarter of 2015.
Boeing’s relations with President-elect Donald Trump took hit last week when he called for cancellation of the Boeing project to build a new Air Force One, saying costs were out of control.
It was unclear how the incoming Trump administration could handle renewed commercial ties between Iran and Western countries following the lifting of international sanctions this year. The Financial Times earlier this month said the Trump transition team was considering new non-nuclear sanctions for Iran.
Prior to the Boeing announcement, the company’s share price had risen 0.4 per cent in New York and it was up 0.7 per cent toward 2130 GMT in after-hours trading.