Boeing is to take a higher-than-expected charge of $1.4 billion to cover post-merger write-offs on the Douglas Products business, pushing the group to the first annual loss in its corporate history.
The charge comes on top of the $1.6 billion already put aside to cover Boeing's own production problems, bringing total charges for the year to $3 billion. The company admits that this will almost certainly lead to a net loss for the year, when full results are released on 27 January.
The write-off covers cancellation costs of the MD-80 and MD-90 programmes, which are due to stop in mid-1999, and a limited role for the MD-11, primarily in freighter markets. An inventory re-evaluation and a review of customer-financing commitments have also been carried out.
Source: Flight International
