Paul Lewis/SEATTLE
Boeing admits that production of the Next Generation 737 is still the group's "biggest problem", but remains confident that it will still have delivered around 550 aircraft of all models by the end of the year.
The company declines to comment on reports that continued problems on the NG737 line may force it to write off a further $250 million in addition to a $350 million charge announced in April and the $700 million already put aside. It confirms, however, that the aircraft line is the "area with the biggest risk and uncertainty".
Key to the question of further charges is the performance of the recovery plan as production of the aircraft goes through its first major ramp-up, from seven a month to 14, with a further rise to 21 still to follow. Boeing chairman Phil Condit says that the ramp-up to 14 and subsequent stabilising of the line represents the "biggest challenge". He adds that Boeing will "-feel better by the end of June "when that effort is behind it, although it will be the end of the year before the full impact of the increases is clear.
Giving its latest monthly update on the recovery plan, Boeing says that 33 NG737s had been delivered by the end of May, compared with only 10 two months ago. A further eight are currently in flight test or refurbishment, while some 23 aircraft are at the pre-delivery and flight-test stage. Another 30 are in the factory and components for a 94 "loaded" into the final assembly line.
Aircraft deliveries across the whole group, are expected to climb above 40 in May, bringing the total for the first five months to 189. Ron Woodard, president of Boeing Commercial Airplane Group, says that a "busy" June should take that total up to to 250 for the first half of the year, with a further 300 to be delivered in the second half.
Production of the 777 at the Everett plant has just been restored to seven units a month, after the company had been forced to throttle back to a rate of five over the last six months as the result of shortfall in vendor-supplied items. Shortages were primarily in seats and in-flight entertainment equipment.
Efforts are now focused on countering a "softness" in the depressed Asian market and filling a six-month shortfall in orders that again threatens to cut production to five a month.
Several big 777 customers, such as Singapore Airlines, have delayed some deliveries, while Asiana's 15 orders appear to be on hold. Boeing will decide in July on the level of 777 production for the final quarter of 1999 and early 2000.
Meanwhile, the first five-per-month 757s and five-per-month 747s are moving through the factories at Renton and Everett, respectively, although Boeing is looking this month at the impact of the Asian slowdown on the 747 production rate, which is likely to decelerate again in mid-1999.
The move of some 757 flight test activity to Everett and 737 refurbishment to Long Beach, California, is having a positive effect, says Woodard, adding that the setting up of a new 737 line at the Douglas Products Division could be done at "minimum cost". He adds: "We are just right at maximum capacity at Renton and Long Beach is a good environment to build aircraft."
Source: Flight International
