But McNerney says there is ongoing monitoring of the stability of the 787 production system—particularly the supply chain—as it pushes production to 10 aircraft per month by year-end. Add in caution about returning to normality once recovery from the battery issue that has grounded the world's 787-8 fleet is complete. “When that all comes together—and I anticipate it sooner rather than later—we're going to be making a call” to launch, he says.
Boeing Commercial Airplanes (BCA) has essentially completed engineering work on the 787-9 and remains on schedule for a first flight in the second half of this year and first delivery early next year, McNerney says.
Despite the battery drama, the rest of the 787 production flow is in its best-ever shape, says Greg Smith, executive vice president and chief financial officer. The supply chain is flowing properly and rework is no longer an issue. Current unit costs, on Line No. 100, are 60% less than in early production at Line No. 8.
“So, good progress in Everett and South Carolina,” says Smith. Boeing expects to pass the program's break-even point in about two years—1.5 years after it reaches the maximum build rate of 10 per month.
But improvements are prompting a thinning of the BCA ranks. Since last October, it has cut 700 contract employees, an effort that will continue “where appropriate,” says chief engineer Mike Delaney. In March, the company announced that 800 machinists will be laid off by year-end, mostly because post-production change incorporation work, which was labor intensive, is drying up on the 787 and 747-8 programs.
On April 19, BCA handed out 60-day warning notices in the first round of what are expected to be 1,500-1,700 layoffs of engineers and technical workers by year-end. A slowdown in non-recurring development work on the 747-8, 787-9 and KC-46 tanker programs is blamed.
Normally, new development absorbs workers shifting off older programs, but Delaney says launches of potential saviors, the 777X and 787-10X, will not come soon enough. Even if the aircraft were approved this summer, the time lag between program launch and hands-on work is too long to sustain the jobs, a Boeing official explains.
As of March 31, BCA employed 84,085, down nearly 670 from Dec. 31, 2012. The layoffs mark the unit's first jobs downturn since it began ramping-up production rates in 2010.
While production on the main commercial programs—737, 777 and 787—has been increasing to meet demand, 747-8 orders are in a slump and its monthly rates will be adjusted downward to 1.75 aircraft from two. First delivery at the new rate will not be until next year, but BCA is not saying just when the lower rate is to begin. Two years of a weak cargo market and a slow intake of passenger orders are hitting the 747 hard. The company received three orders in March—the first since last July. Of 110 total orders taken, 70 are for freighters.