Boeing to shift some defense work out of Washington state: sources

WASHINGTON (Reuters) - Boeing Co plans to announce further streamlining of its defense business on Tuesday, moving significant portions of its defense operations out of Washington state, according to multiple sources familiar with the matter.

The consolidation would focus on defense support services and would not affect Boeing's P-8A spy plane or KC-46 aerial refueling tanker programs, the sources said. Both programs are built on commercial jetliners made in the Puget Sound region of Washington state.

Many of the workers affected will be shifted to the company's commercial jetliner operations, which are growing, said one of the sources on Monday.

Boeing declined to comment.

Union officials said the company has scheduled meetings with defense workers at key sites in the Puget Sound region on Tuesday, and that managers and workers expect the company to announce work will be transferred to other parts of the country.

"We're hearing from managers and members that the company is going to make an announcement that a large amount of Puget Sound defense work is about to be moved out of the state," said Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace (SPEEA).

About two dozen machinist jobs are expected to move to Huntington Beach, California, according to a source familiar with the matter. Boeing's machinist workforce numbers about 31,000, but only a few hundred work on defense.

It was not immediately known where other work would be relocated or how many workers would be affected. About 2,258 of SPEEA's 21,900 members in the state work in Boeing Defense, Space and Security, the union said.

The move is part of Boeing's effort to cut an additional $2 billion in costs from its defense business on top of $4 billion in reductions already announced in recent years in response to dwindling U.S. defense spending and increasing competition.

Defense analyst Loren Thompson said Boeing?s plan was to move as many of the defense jobs as possible to its booming commercial operations, which would reduce the overall impact to the Washington state workforce. ?The net job loss will be less than 1 percent,? Thompson said.

?Boeing?s commercial business is growing while its defense business is shrinking, so it?s logical that you would make these sorts of shifts as a way of using the workforce as efficiently as possible,? said Thompson, chief operating officer of the Virginia-based Lexington Institute.

Boeing has sought to reduce costs in its defense business to help offset revenue dragged lower by declining military spending.

The company is also seeking to increase its foreign sales of weapons.

(Editing by Matthew Lewis)

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