Boeing Cuts 2010 Widebody Production
Michael Mecham
Boeing will reduce 777 production beginning next year and delay buildups in its 747 and 767 production lines, but leave intact rates on its narrow-body 737s, the company said Thursday.
"These are extremely difficult economic times for our customers," said Boeing Commercial Airplanes President and CEO Scott Carson. The company has a backlog of 3,500 airplanes.
The decision keeps intact Boeing's insistence that 2009 production levels would be maintained despite the obvious impact of greatly reduced demand. Boeing has a negative four orders so far this year (28 for 737s, 32 cancellations for 787s, none for another aircraft).
Because it overbooks production slots, Boeing has long maintained that it could keep its assembly lines humming this year. In January, as he reviewed 2008 performance, Boeing Chairman/CEO James McNerney acknowledged that production cuts might be needed in 2010.
The cutbacks and unfavorable price escalation are expected to reduce the company's first-quarter 2009 net earnings by $0.38/share. Boeing reports those earnings on Apr. 22.
With the 747 program in a loss situation, the reduced earnings of that program account for $0.31 of that loss.
Reduced margins on deliveries of an estimated $0.7 will be recorded as they occur for Boeing's four other programs - the 737, 767, 777 and 787.
Michael Mecham adds some commentary on this story at the Things With Wings blog.
Photo credit: Boeing
