Boeing boosts ‘super jumbo’ production

28 April 2011
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30 April 2011 | Adam Leach

Boeing is ramping up production on its 787 aircraft after increasing its gross inventory budget for the project by $1.6 billion (£0.96 billion). 

As reported, a stream of supply chain issues have caused repeated delays to the production of the “super jumbo”, which was expected to be launched in 2008. This week the company announced it is now on schedule to meet its new deadline for first delivery after increasing the production budget and working with suppliers. 

The company is currently producing the planes at a rate of two a month and plans to increase that to 2.5 a month by the end of the year. In a conference call to investors following the release of the firm’s first-quarter results, Boeing CEO Jim McNerney announced that it is looking to further increase that rate. “We have a deliberate and orderly ramp-up plan building to a 10-a-month production rate by late 2013,” he said.

He added that they are “closely monitoring” the health of the production.

On the same conference call, chief finance officer James Bell explained that the company had increased the budget for the project. “Gross inventories for the company now include $14.5 billion (£8.7 billion) related to the 787 work in process, supplier advances, tooling and other non-recurring costs, an increase of approximately $1.6 billion (£0.96 billion) during the quarter,” he said. “We expect the inventory balance to continue to grow as we ramp up production, but the rate of growth will moderate as deliveries are made,” he added.

Discussing the company’s relationship with suppliers as production increases, McNerney said: “We are working closely with our supplier partners to manage these moves to higher rates efficiently and effectively, focusing not only on increasing capacity, but also on improving quality, reducing flow times and lowering costs.”

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