First Delivery Now Expected In Early 2009, 'No Material Impact
On 2008 Earnings Guidance'
As noted previously by ANN, Boeing has admitted that first
flight of the 787 has been moved from the end of the first quarter
of this year to around the end of the second quarter to provide
additional time to complete assembly of the first airplane.
Deliveries are now expected to begin in early 2009, rather than
"The fundamental design and technologies of the 787 remain
sound," said Scott Carson, president and CEO of Boeing Commercial
"However, we continue to be challenged by start-up issues in our
factory and in our extended global supply-chain." Carson said that
while solid progress has been made on the assembly of Airplane #1,
the rate at which jobs are being completed has not improved
sufficiently to maintain the current schedule.
"Our revised schedule is based upon updated assessments from the
787 management team of the progress we have made and the lessons we
have learned to date. This includes our experience on the factory
floor completing production work on the airplane that was
originally intended to be done by our suppliers," Carson said.
Over the next several weeks, Boeing will be working with its
customers and suppliers to assess the specific impacts of the
schedule change on the 787's flight test program and entry into
service. This effort will include an assessment of supplier
progress in meeting their commitments to deliver more complete
assemblies on subsequent airplanes.
"We are deeply disappointed by what this delay means for our
customers, and we are committed to working closely with them as we
assess the impact on our delivery schedules," Carson said.
Under 787 Vice President and General Manager Pat Shanahan, who
assumed leadership of the 787 program last October, Boeing has
provided additional resources to more effectively manage the 787
global supply chain. The company has assembled a team of
experienced executives, business managers and planning specialists
that will be based at the supplier partners, as well as in its own
final assembly facility.
"We have brought together the right skills and leadership from
around the company to ensure a successful start-up of our global
production system," said Shanahan. "We have put the people,
structure and processes in place to execute our plan and we will
take additional steps to strengthen our team if needed. We have
made significant progress in reducing parts shortages, improving
fastener availability and achieving static and systems test
milestones. We are focused on getting the 787 flying, certified and
delivered to our customers."
Boeing reports that its, '2008 financial guidance will be
updated with the impact of these changes when the company holds its
fourth-quarter 2007 earnings conference call on January 30. There
will be no impact from the schedule change on 2007 financial
results and the company does not expect the impact on 2008 earnings
guidance to be significant. Financial guidance for 2009 now will be
provided when the company issues its first quarter 2008 earnings
report in late April, which will follow the assessment of the
impact of 787 schedule changes. The company continues to expect
strong earnings per share growth in 2009. The outlook for the
company's defense business and in-production commercial airplane
programs remains very strong.'