Boeing plans to close its factory in Bankstown, Sydney in 2012 as it consolidates its Australia components manufacturing work in Melbourne.

Most of the 350 affected staff at Bankstown will be offered jobs at Fishermans Bend in Melbourne, where 300 new jobs will be created. Some job cuts are expected, says Boeing.

"The consolidation has been driven by the exit of loss-making third-party work and under-utilisation of both the Fishermans Bend and Bankstown sites," says Boeing.

Each facility is operating at about half capacity, says Boeing Aerostructures Australia's managing director Mark Ross.

"It makes no business sense to carry duplicate overheads," he adds.

Boeing says it makes more sense to move its work to Melbourne as it has invested more than A$200 million ($181 million) there to prepare for the Boeing 787 component production, and because the Melbourne site is owned by Boeing.

Its Bankstown site is on lease from Bankstown Airport, says a Boeing spokesman.

"Our Fishermans Bend plant will also become a designated centre of excellence for composites and is already the focus of considerable research and development effort by Boeing Research & Technology-Australia," says Ross.

Components produced at Bankstown include Boeing 777 rudders, elevators and cove lip doors, Boeing 747-8 wing leading edge, Boeing 737 ailerons, Lockheed Martin C-130 flaps, Bombardier CH300 tail cone and Evolved Sea Sparrow Missile fins, says Boeing.

Manufacturing of these parts will move to Melbourne over the next 30 months, it adds.

However, some third-party work like production of winglets for Airbus' A330, Airbus A340, and Airbus A380 aircraft will be dropped, says the spokesman.

The Australian Manufacturing Workers Union, which represents workers at the Bankstown site, says Boeing's move is a "terrible blow" to the staff in Sydney.

"New South Wales simply cannot afford the loss of these skilled jobs at Boeing together with the thousands of downstream jobs that will be affected," says the union's acting state secretary Tim Ayres.

"We know that the Victorian state government invested A$25 million, matching an equal investment from the federal government to attract Boeing to Australia," he adds.

Ross has denied that government incentives were behind the move to Melbourne, according to local media reports.

Ayres is requesting New South Wales premier Kristina Keneally to call an urgent meeting with unions and Boeing in an effort to keep the company in the Australian state, says the union.

Source: Air Transport Intelligence news