CEO has praise for North Charleston Boeing plant ahead of 787 rollout
Speaking two days before the first South Carolina-assembled 787 Dreamliner is scheduled to make its debut, Boeing Co. CEO Jim McNerney expressed continued confidence in the North Charleston plane-making plant Wednesday.
Delivering Boeing’s quarterly earnings results from the aerospace giant’s Chicago headquarters, McNerney said he “just got back from Everett and Charleston, taking a look at the lines” and believes the 787 program is on track to meet previously announced delivery goals for this year and next.
“I would also add that Charleston looks very good, and you’re going to see the rollout of the first airplane later this week and delivery this summer,” McNerney said. “And I think the learning curve progress in both places (is) giving me more and more confidence every day that the costs that underlie our plans are going to be met.”
McNerney said the delamination concern that arose earlier this year “had to do with workmanship” in the North Charleston aft-body factory but that the shimming error is now well in hand.
He said about 14 or 15 airplanes have been “reworked,” a process that has had an effect on Boeing’s internal month-to-month schedules without dampening the delivery forecast for the year.
“But I would say understood, fixed, moving forward and we’re in good shape,” he said.
McNerney, a director of IBM Corp., was at the Charleston Area Convention Center on Tuesday morning for IBM’s annual meeting of stockholders. He also toured the nearby 787 production line, a company spokesman in Chicago said Wednesday.
The Boeing CEO said Wednesday he would not be making a return trip to South Carolina for the highly anticipated rollout ceremony.
“Jim Albaugh will be leading the entourage on Friday,” McNerney said, referring to the chief executive officer of Boeing Commercial Airplanes.
McNerney reiterated the goals to ramp up production of 787s from the current program rate of 3.5 per month to 5 per month later this year and then to 10 a month by the end of next year. Boeing hopes to deliver roughly 35 to 42 Dreamliners in 2012, including the first from North Charleston this summer.
McNerney’s comments came amid a wide-ranging discussion with analysts and reporters about Boeing’s better-than-expected first-quarter financial results; the 787 program’s profitability and deliveries forecast; and the possible effects of tornado damage in Wichita, defense budget cuts and the European debt crisis on the company’s bottom line.
Boeing’s $923 million in net income for the first three months of this year was a 58 percent increase from profits during the same period of 2011. Quarterly revenue grew 30 percent to $19.4 billion on the strength of increased commercial airplane deliveries, according to Boeing.
The twister that blew through Wichita two weekends ago had no “significant impact” on Boeing’s facilities there, according to McNerney, but he acknowledged Spirit AeroSystems, a major fuselage supplier for the 787 and 737 programs, “continues to manage the challenge of their stressed infrastructure.”
McNerney said Boeing has a strategy to mitigate any effect natural disasters could have on production.
“Charleston is an example,” McNerney said. “That is an element of the thinking.”
A lighter moment during the call came when Cowen and Co. analyst Cai von Rumohr prefaced his question about this year’s Dreamliner deliveries by saying, “This is the first quarter I can remember in history when you didn’t have some kind of slip or screw-up on the 787.”
“I don’t know whether to laugh or cry at the award you just gave us,” McNerney responded eventually, “but having said that, we have increasing confidence.”