Boeing Delivers, Sizzling Quarter Profit Doubles

CEO says 787 troubles under control


"To develop a plane with that sort of technological innovation not even a couple weeks late would be unheard of," Morningstar analyst Chris Lozier said. "I would be extremely, positively surprised if they delivered that plane even in June of next year. I would think when push comes to shove, there will be a couple of late-inning kinks that need to be worked out of the program, as you would expect."

Airbus, for example, has stumbled badly with the 555- passenger A380, which is about two years behind its original delivery schedule.

McNerney said Boeing has implemented about half of the eight contingency plans that are in place to meet the most risky 787 production challenges.

A key hub in the 787 production chain is Charleston, S.C. Global Aeronautica, a joint venture between Alenia and Vought Aircraft Industries, is joining various 787 fuselage sections in Charleston. They will then be flown to Everett for final assembly.

The first large 787 assembly recently arrived in Charleston from Japan. Some of the work that was supposed to have been done before the structure left Japan will have to be completed in Charleston. The Japanese companies have sent workers to Charleston to help, McNerney said.

This is the kind of "travel work" for which Boeing has contingency plans, he said.

Some travel work won't be made up until 787 structures arrive in Everett, where final assembly of the first 787 will begin in the second quarter.

"The kinds of things I'm talking about with contingency plans are having standby capability to make some tubes, clips and brackets in the state of Washington in case they don't show up in some of the components that have been stuffed before they get there," McNerney said.

He said the trouble areas, so far, have mostly involved only a few suppliers or partners. They are responsible for the 787 structure, rather than systems, he said.

"It's tended to be three or four suppliers that we have dedicated a lot of engineering and manufacturing resources to team together with theirs to address schedule and technical risks," McNerney said. "I think we've made good progress on them. Obviously there are flare-ups in the others from time to time that we address quickly. We have standby engineering capability that is waiting to move quickly to help."

P-I aerospace reporter James Wallace

can be reached at 206-448-8040

or jameswallace@seattlepi.com %% BOEING EARNINGS

Fourth quarter

For the quarter ended July 1

Revenue, in billions

2005: $13.9

2006: $17.5

Net earnings, in millions

2005: $460

2006 $989

Price per share

2005: $0.58

2006 $1.29

Source: THE BOEING CO. %%

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