WASHINGTON (Reuters) -
Boeing Co (BA.N), passed over for a
potential $3.6 billion Air Force satellite deal, said on
Wednesday it plans to lay off about 750 workers in Southern
California because of a downturn in its satellite assembly and
integration business.

The company blamed U.S. government delays in awarding a
pair of multibillion-dollar satellite contracts as well as a
loss to Lockheed Martin Corp (LMT.N) last week in a battle for
a contract for a new generation of global positioning
satellites known as GPS III.

"The stretching out of government contract awards, along
with a continuing lighter demand in the commercial marketplace
for large, high-power satellites, has created a surplus in the
work force that must be addressed now so that we are
competitive," Greg Cooning, general manager of Boeing Space and
Intelligence Systems business unit, said in a statement.

The government has delayed the Pentagon's planned
Transformational Satellite Communications System and a weather
satellite system known as Geostationary Operational
Environmental Satellites System.

"Last week's loss further complicated matters," said Joseph
Tedino, a Boeing spokesman.

The job cuts mainly involve engineers, although all skills
will be affected, the company said. It said most were in El
Segundo and Seal Beach, California.

Boeing expects to issue 60-day notices in May for an
initial group of 100 employees, with layoffs to occur in July.
Cooning's unit plans to cut its current work force of 7,200 to
about 6,450 at the end of 2008, it said.

"This is a difficult time for employees in our space
systems organization, but we are committed to strengthening the
business," said Cooning. "These reductions in force are
necessary to accomplish that goal."

Boeing said it would help affected employees find jobs at
other company locations, if possible.

(Reporting by Jim Wolf, editing by Leslie Gevirtz and John
Wallace)

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