This newly announced delay, FlightBlogger has learned, comes as part of a comprehensive status review of Boeing’s commercial programs conducted by newly installed commercial airplanes chief, Jim Albaugh. In addition, program sources indicate the level of completion of tasks on the 747-8F required ahead of first flight stand at just 50%.
Boeing to Recognize Third-Quarter Charge for the 747 Program
CHICAGO, Oct. 6 /PRNewswire-FirstCall/ — The Boeing Company (NYSE:
BA) today said it expects a pre-tax charge against third-quarter
results of approximately $1.0 billion due to increased production costs
and the difficult market conditions affecting its 747-8 program.Approximately $640 million of the charge reflects
higher estimated costs to produce 747-8 airplanes at both Boeing and
supplier facilities. As the program assembled major components of
initial 747-8 Freighters during the third quarter, it became clear that
late maturity of engineering designs has caused greater than expected
re-work and disruption in manufacturing. This is resulting in
additional resources being applied on the program and higher supplier
expenses, which are the primary cost drivers.The remaining $360 million of the charge relates to challenging
market conditions and the company’s decision to maintain the 747-8
production rate at 1.5 airplanes per month nearly two years longer than
previously planned, deferring an increase to 2 per month. Higher
allocation of fixed expenses and volume-based penalties to suppliers
are the main drivers of the additional costs.Because the 747 program is in a loss position, costs
associated with the factors above will be immediately recorded in the
third quarter for future 747-8 deliveries.The company now expects first flight of the 747-8
Freighter to occur by early next year with the flight test program
taking place in 2010. First delivery of the 747-8 Freighter is now
expected in the fourth quarter of 2010. First delivery of the
Intercontinental passenger variant remains scheduled for the fourth
quarter of 2011.
This is a breaking story and will be updated.
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This post originally appeared at Flightglobal.com from 2007 to 2012.