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Boeing 777
A Boeing 777 jet is assembled at the company’s plant in Everett. (Boeing Photo)

The Boeing Co.’s decision to trim back production of its wide-body 777 jet is likely to bring bad news for employment at its plant in Everett, Wash., while a boost in the company’s quarterly dividend should come as good news for investors.

The bad-news, good-news situation was laid out on Monday, sparking ups and downs in Boeing’s share price. By the end of today’s trading, the price was slightly down.

The planned cutback in 777 production from the current 8.3 jets per month to five per month next August points to a dramatic softening in the market for twin-aisle, wide-body jets. Production of Boeing’s 747 jumbo jets has been reduced as well. “The twin-aisle market is glutted,” Teal Group analyst Richard Aboulafia told Reuters.

The Seattle Times reported that the Boeing vice president responsible for the 777 program, Elizabeth Lund, told employees in a message to expect job reductions next year. “The exact number of affected positions has not yet been determined,” Lund was quoted as saying. “We will do our best to lessen the impact.”

Boeing Commercial Airplanes’ employment figures have already fallen by more than 5,000 jobs since the start of the year.

The 777 production rate is slated to drop further in 2018, to 3.5 planes a month, to accommodate the transition to 777X production.

The continuing softness in the market means that Boeing’s sale of 30 wide-body jets to Iran Air is more important than ever. This year the GOP-led House passed legislation aimed at blocking airplane sales to Iran – but the bill was stymied in the Senate, and it’s not clear whether the effort will be renewed next year.

Meanwhile, Boeing is moving ahead with plans to ramp up production of single-aisle 737 jets at its Renton plant. Iran Air wants 50 of the 737 MAX 8 variant.

In a news release announcing the increased dividend, Boeing CEO Dennis Muilenburg touted the company’s “large and diverse” order backlog and improved efficiency. “Boeing is well positioned to generate increasing cash flows and meet our commitment to provide competitive returns to our shareholders,” he said.

Boeing’s board of directors decided to boost the quarterly dividend by 30 percent, to $1.42 per share. The board also authorized spending $14 billion to buy back shares over the next 24 to 30 months. This year, Boeing repurchased $7 billion in shares to boost their value.

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