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Jobless rate up as Boeing jobs leave L.A.

August 3, 2010 12:00:00 AM PDT
A gloomy forecast Tuesday on unemployment from the Obama administration: Treasury Secretary Tim Geithner warned the jobless rate may go higher still before it comes down. That news is of little value to some local Boeing workers learning their jobs may be gone forever.Anxiety is taking flight in Long Beach. Boeing has announced that 800 jobs involving the C-130 and B-1 jets are being slashed because the cost of doing business here is becoming too expensive.

"After a review of not just our current costs but what the future projected costs would be, the decision was made, and it is a very tough decision, to transition both of these programs to Oklahoma City," said Boeing spokesman Jerry Drelling.

Five-hundred-fifty employees will be offered job transfers to Oklahoma City, while the other 250 will be laid off. The engineers were given the shocking news Monday.

"The fact is you have a lot of families here who've been living and working here for many decades, and to suddenly be faced with either not having a job or having to move to Oklahoma City, it was a little bit of a jolt," said Drelling.

The news of Boeing's job cuts in Long Beach comes as Friday's jobs report is expected to show that 70,000 additional jobs were lost nationwide last month, and unemployment rose from 9.5 percent to 9.6 percent.

"The job market unfortunately is very slow," said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. "If you talk to businesspeople, especially small- to medium-sized business, they're being very, very cautious. They don't want to add any new workers until they're certain that the recovery is real."

"When they see a little hope that there may be jobs out there, they start to come back in again," said Treasury Secretary Geithner. "And that can cause the measured unemployment rate to go up temporarily."

While unemployment rises, the Obama administration preaches optimism with the economy showing growth for a fourth straight quarter and the Dow's 7 percent gain in July being its biggest in more than a year.

"After 18 months, I can say with confidence we are on the right track," said President Obama.

"It's going to be a long hard slog to get that unemployment rate down," said Kyser. "It's going to cause a lot of indigestion for elected officials."

Meantime, the indigestion and anxiety have already set in for 800 Boeing employees.


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