
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, July 17, 1990                   TAG: 9007170019
SECTION: BUSINESS                    PAGE: A3   EDITION: METRO 
SOURCE: Associated Press
DATELINE: ST. LOUIS                                LENGTH: Short

MCDONNELL DOUGLAS TO CUT 17,000 JOBS

McDonnell Douglas Corp., the nation's largest defense contractor, announced plans Monday to reduce its work force by up to 11 percent. The company will cut as many as 17,000 jobs to help shore up its sagging bottom line.

John F. McDonnell, chairman and chief executive officer, said the measures should save the company more than $700 million this year, or about 5 percent of annual expenses, and put the aerospace giant on "very solid footing."

The company expects to eliminate between 14,000 and 17,000 jobs through layoffs and attrition, McDonnell said. The bulk of the cuts will be made in St. Louis and Long Beach, Calif. Hundreds of jobs also will be cut in Arizona.

McDonnell Douglas stock fell $2.50 to $42.37 1/2 a share on the New York Stock Exchange. The company reported a $2 million profit for the first quarter of the year, down 98 percent from the same period a year earlier. For 1989, profit fell 37 percent, to $219 million, and would have been much lower if not for a one-time $178 million gain from an accounting change.

Much of the weakness stems from losses at Douglas Aircraft Co., the Long Beach subsidiary, which has been struggling with an overwhelming commercial-jet order backlog, cost overruns and a major overhaul in corporate work rules.

McDonnell Douglas also has had problems with defense aircraft, and faces the prospect of major cuts in defense spending. It faces cost problems on three military programs, the C-17 cargo plane, the A-12 advanced tactical aircraft and the T-45 Goshawk trainer.

by CNB