Exclusive: Boeing 787 output hiccups reemerge at assembly sites

Fri Aug 8, 2014 4:07pm EDT
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By Alwyn Scott

NEW YORK (Reuters) - Boeing has pushed some factory work on the 787 Dreamliner to the uncovered tarmac outside its assembly plant in Washington state in an effort to keep churning out the popular plane at a rate of one every three days, according to people with knowledge of the situation.

At the same time, the sources said, at least 16 Italian-made fuselage sections for the 787 have stacked up in a Boeing hangar in Wichita, Kansas, rather than being shipped directly to the factory, a sign of changes in the production process.

The unusual shifts, details of which have not been previously reported, are partly a response to unfinished jobs building up as 787s move along the assembly line and partly an effort by Boeing to speed up the factories.

Boeing spokesman Marc Birtel said outside work is not unusual when unfinished jobs build up along the assembly line, and is not unique to the 787 line. He said the company has reduced the backlog of jobs since January, though the sources said the situation has gotten worse.

The company is trying to streamline 787 production and cut costs while hitting its target of delivering a record 110 Dreamliners this year, up from 65 in 2013.

Investors are counting on smooth Dreamliner production to lift Boeing's stock, which has fallen 12 percent this year on fears that production could falter as Boeing speeds up the factories and introduces new models, and that global demand for new airplanes will taper off after years of heady growth.

Boeing stock was up 0.13 percent, to $119.99, in afternoon trading on the New York Stock Exchange.

In some sense, the production problems reflect the aerospace sector's record-setting strength. Order books at Boeing and rival Airbus (AIR.PA: Quote) are bulging, with about 10,000 planes valued at more than $700 billion combined. Both companies are speeding up output of their best-selling models.   Continued...

The Boeing logo is seen on a Boeing 787 Dreamliner airplane in Long Beach, California March 14, 2012. REUTERS/Lucy Nicholson