Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Saturday, May 17, 2008 Two Dreamliner production lines in Everett unlikely By Michelle Dunlop Herald Writer EVERETT -- With deliveries of its 787 jet running an average of 20 months behind schedule, you might wonder why the Boeing Co. hasn't launched a second production line. Yvonne Leach, spokeswoman for the 787 program, said last week that the company is studying ways to improve 787 production, but she wasn't sure that a second line was among the options the company was considering. Boeing has about 900 787s on order and faces billions of dollars in late penalties from customers after delaying the jet several times. Although a second line might help the company catch up and reduce its penalties, industry observers don't see a second line as a likely option for Boeing. The costs, not only for Boeing but also for its suppliers, are a major deterrent in getting another line going, said analyst Paul Nisbet with JSA Research. "You don't need another production line, you need materials coming in complete," Nisbet said. Boeing believes it can put together 10 787s monthly when it gets the line running at its peak. After several delays, Boeing has pegged 2010 for the date that it will reach the 10-jets-a-month mark. Nisbet thinks that Boeing has the potential to build 12 787s monthly, a rate that Boeing doesn't need to exceed, Nisbet said. Boeing has announced three major delays on its Dreamliner. The latest pushed the jet's first delivery back at least 15 months to the third quarter of 2009. Subsequent deliveries, however, are running 20 months late on average. Suppliers in Japan, Italy, Kansas and South Carolina build major sections of the 787 and ship those to Everett, where final assembly of the 787 takes place. The company has blamed parts shortages, production difficulties and incomplete shipments from partners as reasons for the 787's tardiness. Nisbet said he could envision a situation where Boeing temporarily might use an extra hand in completing work from suppliers. "They're still doing quite a bit of work that their subcontractors aren't getting done," he said. Boeing could use on a short-term basis a pre-assembly location, where workers would finish any work left incomplete by subcontractors. One location where a lot of 787 assembly work already takes place is at Global Aeronautica in South Carolina. The 334,000-square-foot facility is where much of the 787's fuselage comes together. The company originally was a joint venture between Italy's Alenia Aeronautica and Vought Aircraft Industries. However, Vought recently sold its shares of Global to Boeing. Workers at Global assemble, integrate and test roughly 60 percent of the Dreamliner's fuselage before shipping it to Everett. Boeing's Leach said she had not heard of an additional line being opened at Global Aeronautica. There has long been speculation that if a second line was needed Boeing might look elsewhere than Everett to build it. However, Boeing would have room for a line in Everett if the 767 line comes to an end. At its production rate of 12 jets per year, Boeing wouldn't finish off its existing commercial 767 orders for four years. The company had hoped to keep the 767 going with a $35 billion contract from the U.S. Air Force. But the Pentagon picked a tanker proposed by Northrop Grumman and EADS over Boeing's in late February. Boeing is waiting for the Government Accountability Office to review the Air Force's decision. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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