Executives plan to double production within 6 months
By David Kesmodel
Texas Insider Report: EVERETT Wash. - The wide-body jetliner took off just after dawn
from Paine Field adjacent to Boeings factory north of Seattle and was expected to land Wednesday morning at Tokyos Haneda Airport. Under overcast skies ramp workers cheered the planes takeoff which was about 45 minutes later than expected.
Boeing executives said they plan to nearly double production of the Dreamliner within six months and expect revenues for each plane to start exceeding costs by the end of the decade.
Boeings First Dreamliner - View Slideshow
Jim Albaugh chief executive of Boeing Commercial Airplanes said in an interview Monday that the company plans to boost its output of Dreamliners in November to 2.5 a month from about two per month today. Boeing will go to 3.5 planes a month in late winter or early spring he said.
The Dreamliner project has been a hard one from the beginning Mr. Albaugh said after Chicago-based Boeing handed a ceremonial key to Dreamliner launch customer ANA during a rainy Monday celebration. We have two more challenges in front of us Mr. Albaugh said. One is getting up the production rate and the next one is being profitable.
Boeing Chief Executive Jim McNerney said Monday that the point at which each Dreamliner will turn cash positive is a number of years out in front of us but will come before 2020.
He said the business were in is huge sums for making the airplanes in the beginning and then an annuity for the next 25 to 35 years. Thats the business model we have.
Analysts have said the entire 787 project may not become profitable for years. Some analysts have projected as Mr. McNerney did Monday that Boeing will start posting positive gross margins on each airplane later this decade.
Boeing executives face pressure to speed up manufacturing of the jets and slash costs in the production system. On Monday they reiterated their goal of making 10 Dreamliners a month by late 2013. That would mark the highest production rate for a wide-body jet in the industrys history analysts say.
The Dreamliner the first commercial jet made largely of plastic-composite materials instead of aluminum was contractually delivered to ANA on Sunday. The ultra-efficient jet arrived more than three years behind Boeings original schedule. It had been plagued by design and production issues including substantial quality-control problems in its supply chain.
Mr. Albaugh said Boeings supply chain for the Dreamliner now is in very good shape and the company is working on paring costs to boost the projects financial prospects.
We have a program were working on with our suppliers using lean-manufacturing techniques he said. The effort will tackle problems such as: How can you take something that takes one hour and a half to assemble and take that down to 15 minutes?
Dreamliner Deferred
Boeings long-awaited 787 Dreamliner was dogged and delayed by problems. See stock price key events and in red production delays.
Mr. Albaugh said Boeing is confident in its ability to speed up production because it now controls key parts of its supply chain. The company for instance acquired suppliers in South Carolina that made the middle and rear sections of the jettwo key areas of focus for the production increase. We have under our control the elements necessary to go up in rate he said but this is not without risk.
Thank you for waiting for this day Mr. McNerney said in Japanese to ANA CEO Shinichiro Ito during Mondays ceremony.
Mr. McNerney called the twin-aisle Dreamliner an incredible machine adding Game-changing innovation is never easy.
The company has orders for more than 820 of the long-range planes making the Dreamliner its fastest-selling commercial jet ever.
Separately Mr. Albaugh said Boeing is making progress on resolving contractual issues for first deliveries of its new 747-8 cargo jet to Luxembourgs Cargolux Airlines International SA. On Sept. 16 Cargolux told Boeing it was refusing delivery of the first new 747-8 freighter plane just three days before a hand-off ceremony.
The issue were working on with Cargolux has to do with an upgrade that we need to do to the airplane said Mr. Albaugh who declined to elaborate.
Weve been in a good dialogue with them…Im confident that well deliver that airplane in the near term.
More than three years behind schedule Boeing Co.s new 787 Dreamliner jet took wing Tuesday as All Nippon Airways Co. flew the plane to Japan where it will begin commercial service next month.
