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<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Boeing confirms new delay in 787's first flight, delivery 1/16/08 • Boeing edges Airbus on orders in 2007 1/16/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Wednesday, January 16, 2008 More 787 delays? By Michelle Dunlop Herald Writer EVERETT -- The Boeing Co. could announce another delay to its new 787 Dreamliner program as early as today. Already six months behind schedule, Boeing's fast-selling 787 faces another setback of at least two months, according to a Wall Street Journal report released Tuesday. The Dreamliner may not take its first flight until June, making it nearly impossible for Boeing to deliver the first customer 787 by year's end. The company's hope of ramping up to deliver 109 jets in 2009 also appears in danger. Boeing's stock dropped sharply to $76 when the story surfaced and closed at $77.86, down $3.81 for the day. The firm did not comment on the report. Citing unidentified sources familiar with the 787, the Journal said Boeing workers still battle a variety of problems with the first Dreamliner in Everett. Boeing's new 787 will be made of roughly 50 percent carbon-fiber composite material, a change from the mostly aluminum commercial jets in service. The aerospace company also increased its reliance on foreign partners, flying into Everett major assemblies built in Italy and Japan. If confirmed, this would be Boeing's third delay to the Dreamliner, which prompts many industry observers to suggest that customer and investor confidence in Boeing is wearing thin. Last year, Boeing's commercial rival Airbus struggled to overcome a series of delays on its A380 superjumbo jet program. In early September, Boeing officials confirmed a delay in the 787's first flight but maintained that the Dreamliner would be delivered on time to All Nippon Airways of Japan this May. Jim McNerney, Boeing's chief executive, labeled the delay a "stutter step" but emphasized it was one that Boeing could handle. Just weeks later, the company pushed back the initial flight and delivery of its first new jet in more than a decade by six months, citing parts shortages and production issues. Some analysts have suggested that Boeing's race to roll out its 787 on 07-08-07 in Everett played into the delay. Boeing says that fastener shortages forced its partners to ship major pieces without wiring and with temporary parts. The "traveled work" has been more difficult to straighten out than Boeing anticipated. Boeing put a new 787 leader, Pat Shanahan, in charge of the program in October. In his first 787 update late in 2007, ­Shanahan predicted that Boeing would turn the power on to the Dreamliner by the end of January and have the plane in the air by March. The Wall Street Journal said Boeing may not power up the plane's electronics until March. It takes two to three months of testing for engineers to clear the plane for flight after the power gets turned on, so that could push flight testing into June. "People are extrapolating a worsening situation that Boeing has lost control of the program, both from the management standpoint but perhaps from a financial standpoint as well," since it would have to pay costly penalties to airlines if it delivers the 787 late, said Peter Jacobs, an analyst with Ragen MacKenzie, a division of Wells Fargo Investments. Leeham Co. analyst Scott Hamilton said he doubts any airline will cancel its 787 order. The Dreamliner has won more than 800 orders. The only similarly sized, mostly composite jet on the horizon is Airbus' A350 Extra Wide Body jet, due to enter service in 2013. In the meantime, he said, Airbus might get a few orders for its A330 from 787 customers awaiting their Dreamliners. Hamilton views the 787 delay as perhaps more damaging than the delays Airbus faced with its A380. The Toulouse, France-based jetmaker struggled with in-house wiring issues, not the supply-chain problems confronting Boeing. If Boeing does announce a delay, Hamilton expects the company to "point fingers" and name the suppliers that are falling behind or sending incomplete assemblies. "But ultimately, the buck stops with Boeing," Hamilton said. The Associated Press contributed to this report. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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