Results and progress

Any time you’re reporting a net loss for the quarter, you’re having a tough time. Clearly the bottom line about Boeing’s 3rd quarter was that our bottom line wasn’t good.

You can read the full earnings news release on our Boeing Mediaroom site.

But there’s another significant part of the story that I’d like to stress. And that is, despite our setbacks, we’re making good progress on our Commercial Airplanes development programs.

Our new BCA leader, Jim Albaugh, told employees today that our teams are working through the challenges. And although it’s not going to be easy (and obviously has not been easy thus far), we’re working to get the 787 Dreamliner and 747-8 into the air, successfully flight tested, and delivered to our customers as soon as possible.

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Progress in Everett: The 747 program completed ground vibration testing on Monday for the 747-8 Freighter, one of the critical milestones leading up to first flight. The first 747-8 Freighter will be “factory complete” and ready to roll to the paint hangar in the next few weeks.

Let’s talk a bit about the 787. In the 3rd quarter we made some significant steps to deliver on our promises. We announced a new program schedule in August, and we’re performing to that schedule. Installations of the fittings on the static-test airplane and the six flight-test airplanes are going well. Next up, after installation on the full-scale static test airframe is complete, we’ll re-test the modification on that airplane.

Then, after successfully completing that test and being cleared for flight, we’ll re-do some of the gauntlet and taxi testing on airplane #1. After that, we’ll fly. We still expect that to happen by the end of the year, with first delivery scheduled for the fourth quarter of 2010.

By the way, assembly has begun on Airplane #11 (which is the 5th production airplane) and with this airplane we’re already seeing the results of the continuous improvement with each successive airplane down the line. Components for Airplane #12 are beginning to arrive in Everett, and despite the issues we’ve had, the 787 team, including our supplier partners, is progressing toward establishing full-rate production.

Of course there’s a lot of work left to do, including development of the 787-9, but it’s important to stop and take note of how far we’ve come.

As Jim Albaugh noted, “Designing and building an airplane that will change the way people experience air travel and revolutionize the industry is a world-class challenge. At Boeing, we always do the hard things. I have great confidence in the 787 team and in the men and women from around the entire company who are supporting the team every day.”

We also provided information about the 747-8 today. The first freighter is more than 90% assembled, and its engines have been hung, and the second is more than 80% complete. We’ve achieved “power on” for both airplanes. We’re applying the lessons we’ve learned during the assembly of Airplane #1 to our work on Airplane #3. In fact, the initial join and integration has improved noticeably with Airplane #3, and it is now about 75% complete.

We expect to fly the first 747-8 Freighter by early next year, with first delivery in the 4th quarter of 2010. We’re also making good progress on the 747-8 Intercontinental - the passenger model – which has now surpassed 75% design release and has completed critical design review.

You’ve heard us say before that we have to do better on our development programs. We have confidence that we will. We’re optimistic that sooner rather than later, we’ll get the 787 and 747-8 through their flight test programs and delivered to our customers.

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The 737 moving line in Renton: Our established airplane programs enjoyed a solid 3rd quarter.

I think that at the core, our business is performing well. We had good news this past quarter on our established 737, 767 and 777 airplane programs and in our Commercial Aviation Services areas. We delivered 113 airplanes during the quarter, including 52 in September, the most deliveries in a single month since November 2001.

We don’t talk often enough about our Services business, so I should mention a few successes here. In the past quarter we supported Air China, on a fix to 747 cargo nose door, and delivered a second 747-400 Boeing Converted Freighter (BCF) to Air China Cargo. In addition, Boeing Airplane Health Management added Air China and FedEx as customers in the quarter, bringing to 34 the number of global customers for this service on more than 800 airplanes.

So, looking ahead, there’s a lot to do in the 4th quarter and beyond. It remains a challenging time. No surprise there. As 2009 turns to 2010 we’ll be focused, as always on executing on our development programs and operating at the highest levels of quality.

We’re determined to grow and improve – to emerge from the current market challenges as a stronger company that offers the right products market-leading support our customers expect of us.

That’s our goal. That’s what keeps us moving forward.

Comments (4)

Jerry (New York):

Thanks again for your efforts to inform.

There was some ambiguity in Jim Mcnerney's comment about the status of the 787 side body fix that has created some confusion.

He indicated that they will "complete and validate the detailed design this week".

You write that "Installations are going well. After installation on the full scale static airframe is complete, we will retest the modification"

The question is whether the "validation" scheduled for this week of the detailed design is the same as the "retesting of the modification" that you describe.

Does "validation of the design" only indicate a modeling manner or a physical testing as you indicate. Is this validation prior to the installation and is then followed BY the installation.

These are big differences and have been confused by similar terminology.

Chris C (South Africa):

It's certainly good news that the ground vibration tests have been concluded on the 747-8F! Looking forward to "factory completion" and paint soon!

Norman (Long Beach, California, United States):

Times are tough and Boeing is no exception in the manufacturing industry on the difficulties now and in the immediate future.

But the news should not be all bad, The 747-8 is 90% or more completed with the completion of the vibration tests and the 787 should fly before year's end.

Paulo M (Johannesburg, RSA):

The blogger P.Sumantri of France wrote of observing the GVT from below the 747 on the Testing 1,2,3 blog entry here. I'd like to see that.

Nice to see a 2009 picture of the Everett assembly building filled with 747's. Looking forward to better economic times to support it and the 787, with Boeing ready to provide the goods.

Really nice shot of a 737-800 (I think) there. Sharp, sleek looking plane.

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