Published: Wednesday, February 6, 2008
787 delays cost dearly, supplier says
HARTFORD, Conn. -- Production delays for the Boeing Co.'s 787 are putting a strain on cash flow at a United Technologies Corp. division that spent $200 million last year on research and development for the new widebody jet.
Boeing announced last month that the inaugural flight of the Everett-built 787 will be delayed up to another three months, pushing delivery of the first plane into early 2009. It's the plane's third delay.
"We have started negotiations with Boeing, talking about the fact that this latest delay especially is going to cause us heartburn from a cash flow" perspective, Greg Hayes, United Technologies' vice president of finance and accounting, said at an annual aerospace and defense conference in New York.
"It's been a difficult process because of delays in the aircraft. Obviously, we were disappointed in the first delay last year and the second delay that was just announced," he said.
United Technologies' Hamilton Sundstrand division spent nearly $200 million for the 787 in 2007, about half of all research and development spending at Hamilton Sundstrand, Hayes said. The division is contributing the airline's auxiliary power system, cabin temperature management and control, pressurization control, heating and cooling and other systems.
"So there's pressure on R & D even this year," he said
Suppliers of Hartford-based United Technologies are also feeling the financial impact, he said.
Mary Hanson, a spokeswoman for Boeing's 787 program, would not comment on discussions Boeing has had with other businesses.
Boeing's new schedule calls for test flights to begin by late June.
Boeing announced last month that the inaugural flight of the Everett-built 787 will be delayed up to another three months, pushing delivery of the first plane into early 2009. It's the plane's third delay.
"We have started negotiations with Boeing, talking about the fact that this latest delay especially is going to cause us heartburn from a cash flow" perspective, Greg Hayes, United Technologies' vice president of finance and accounting, said at an annual aerospace and defense conference in New York.
"It's been a difficult process because of delays in the aircraft. Obviously, we were disappointed in the first delay last year and the second delay that was just announced," he said.
United Technologies' Hamilton Sundstrand division spent nearly $200 million for the 787 in 2007, about half of all research and development spending at Hamilton Sundstrand, Hayes said. The division is contributing the airline's auxiliary power system, cabin temperature management and control, pressurization control, heating and cooling and other systems.
"So there's pressure on R & D even this year," he said
Suppliers of Hartford-based United Technologies are also feeling the financial impact, he said.
Mary Hanson, a spokeswoman for Boeing's 787 program, would not comment on discussions Boeing has had with other businesses.
Boeing's new schedule calls for test flights to begin by late June.
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