Business

<< Previous   of   Next >> Associated Press  (click to enlarge) Boeing president and CEO Jim McNerney addresses a business conference Monday in Seattle. Despite delays in the 787 Dreamliner, McNerney reaffirmed the company's international production strategy.   ADVERTISEMENT   Related Stories • Iraqi Airways to buy 40 new Boeing jets 5/6/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, May 6, 2008 Boeing defends 787's outsourcing CEO Jim McNerney says the company will stick with the 787's worldwide supply chain despite the shortcomings Associated Press SEATTLE -- The Boeing Co.'s chief executive officer said Monday that outsourcing production of parts for the 787 jetliner to manufacturers worldwide remains a good plan, despite four production delays and costly penalties. But CEO Jim McNerney also conceded that relying on Boeing's far-flung suppliers hasn't been completely smooth. "The supply chain was a very aggressive move by us," McNerney said. "In a couple cases we gave our partners a little more work than they could handle effectively." In at least one case, Boeing has had to take over work it had contracted out to partners. The company took control over some 787 pre-integration work -- done before the aircraft parts are shipped to Everett for final assembly -- when it agreed to buy Vought Aircraft Industries' 50 percent share of ­Italian-American fuselage builder Global Aeronautica in March. "If we have to do something like that somewhere else, we'll consider it," McNerney said. Boeing's unprecedented plan to assemble a jet from components manufactured largely by other companies has resulted in production delays and four postponements of test flights for the company's first newly designed jet in over a decade. The delays will likely cost Boeing billions of dollars in penalties. The outsourcing will also be an issue when contract negotiations between Boeing and the International Association of Machinists and Aerospace Workers begin on May 9. Speaking after a keynote at an annual Seattle Business Forum luncheon hosted by Western Washington University, McNerney said the union's stance on outsourcing won't change the fundamentals of Boeing's international production model. Tom Wroblewski, president of IAM District Lodge 751, said the union opposes outsourcing so much of the work traditionally done by union members but wouldn't say whether it would demand a shift in Boeing's strategy. The contract talks are "our opportunity to show the company what we've been telling them all along, that as you start to subcontract you lose control of the product," Wroblewski said. "Our members have been the ones putting it together and installing the systems."

1. Arlington brothers’ fight led to death, police say 2. Detectives consider slaps to father lethal 3. Woman found dead at Bothell house fire 4. Two teens hurt in collision near Granite Falls 5. Lottery win helps Lake Stevens convenience store owner pay bonuses 6. Everett man shot in groin; two men, one woman are arrested 7. I-5 car chase was result of driver's medical condition 8. CBS cancels ‘As the World Turns’ 9. Jail inmates’ meal complaint omits a crucial fact 10. Locker dips toe in NFL pool 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Zambian woman thanks students for their help • Food banks see rise in use • ‘Making Spirits Bright’ in Edmonds • Wolfpack takes aim at state • Seahawks help students smile • 95 and still volunteering • Sno-King joined by local TV king • Veterans back for Wildcats • Lynnwood seeks to plug $2 million budget gap • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million