Boeing reports reduction in traveled work for 787 program

By Liz Segrist
lsegrist@scbiznews.com
Published July 23, 2014

Traveled work for the 787 program has “been significantly decreased” and is now down by 33% from this time last quarter, Boeing Chairman and CEO Jim McNerney said today during a second-quarter earnings call for the company.

Boeing South Carolina recently achieved its goal of producing three 787-8s per month after having some jobs behind schedule earlier this year, which resulted in traveled work — unfinished work that is moved on to final assembly for completion there, in order to remain on schedule.

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Boeing South Carolina workers were paid out one-time bonuses in June for achieving the rates and reducing traveled work, spokeswoman Candy Eslinger said then.

Boeing is focusing on optimizing efficiencies to produce 10 Dreamliners per month between its Lowcountry and Puget Sound operations while also integrating 787-9 production work, McNerney said.

As for the 787-10, McNerney said planning for the jet is on schedule with first delivery set for 2018.

“Overall, we have made solid improvements in the 787 program, but we have a great deal of work ahead as we increase production and introduce the early stages of 787-10,” McNerney said. “We remain on track to deliver 110 787s in 2014.”

McNerney said the 787 program achieved milestones during the second quarter, including the first 787-9 delivery to Air New Zealand and the certification of the 787-8 to fly routes up to 5 1/2 hours away from a landing field.

Boeing South Carolina produces parts for the Dreamliners. It shares assembly of the 787-8 with its Puget Sound counterparts and expects to share 787-9 assembly this fall as well. The 787-10 assembly site has not yet been announced.

McNerney said the 787 production teams are focused on increasing rates, streamlining operations and day-to-day operations.

Second-quarter results

Boeing reported $22 billion in revenue during the second quarter, up 1% from the same time last year.

Boeing executives attributed strong revenue to higher commercial deliveries. Boeing delivered 181 commercial jets during the second quarter, up 7.1% from the same time in 2013. Second-quarter deliveries included 30 787 Dreamliners.

Operating earnings were $1.79 billion, up 4% in the second quarter, and net earnings were $1.6 billion, up 52% year over year. Earnings per share were $2.24, up 59% from this time last year. Operating cash flow for the quarter was $1.8 billion.

“Overall, our strong first-half financial performance, sustained focus on growth and productivity, and positive market outlook support our increased earnings guidance for the year,” McNerney said.

The company’s commercial sector reported $14.3 billion in revenue during the second quarter, a 5% year-over-year increase in revenue.

Commercial Airplanes booked 264 net orders during the quarter. Backlog remains strong with more than 5,200 airplanes valued at a record $377 billion.

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