Boeing says it will make 747 panels, but for whom?

EVERETT — The Boeing Co. says it plans to start making 747 fuselage panels in Georgia by 2018.

But for whom?

The line’s current order backlog will only last another couple years at current production rates, which Boeing has already cut three times in recent years.

Boeing remains optimistic about finding future sales of the 747-8 freighter. But industry analysts are far more skeptical, with many saying that the line likely will close after delivering Air Force One replacements.

The company will take over the work from Triumph Group following months of failed contract-extension negotiations between the two companies. The 747 work has been a drag on Triumph, which had to take an $152 million accounting loss in January.

The panel work and Triumph’s tooling are being moved to Boeing plant in Macon, Georgia, which is now part of Boeing’s defense division. The plant’s military work will end by mid-2016, according to the company.

After that, Boeing Commercial Airplanes will take over at the site and begin transitioning to 747 work. The plant’s workforce “will be temporarily reduced during the transition,” the company said in a news release.

The Macon plant will ramp up to full production by mid-2018 with up to 200 workers.

The company currently is competitively bidding other 747 work done by Triumph, including the plane’s floor beams, flight surfaces and part of the tail known as the empennage.

It should be clear where that work will be done by the end of the year, the announcement said.

“While our initial focus is on production of fuselage panels for the 747, the Macon facility provides us a high-quality alternative for structures work currently outsourced to other suppliers,” said Kent Fisher, a Boeing vice president and general manager of supplier management. “It’s also an attractive option for developing new airplanes.”

Triumph’s contract runs through line number 1574, which should come on the final assembly in Everett in mid-2019 based on current production rate of 1 airplane a month.

The Wayne, Pennsylvania-based supplier has said it will continue to improve productivity and cut costs on its 747 work.

But that might be a challenge “with a workforce that knows the program ends in less than 50 units,” said Sam Pearlstein, an aerospace stock analyst with Wells Fargo.

Right now, Boeing doesn’t even have enough orders to finish its contract with Triumph. At the end of August, the airplane maker had 29 unfilled orders, according to its website.

Most of those orders are either in final assembly or have rolled out of the Everett factory.

The four new 747 orders Boeing got this year have been offset by cancellations. Since 2008, the company has only logged 16 net orders for its four-engine jumbo jet, according to its website.

The passenger version has fallen out of favor with airlines.

With nearly as much capacity and lower operating costs, Boeing’s new 777-9 was “the final nail in the coffin” for the 747-8 passenger version, said Scott Hamilton, an aerospace analyst and owner of Issaquah-based Leeham Co.

Demand is weak for the freighter version, too, he said. “The air cargo market is still sucking hind tit, and I just don’t see a future for the airplane.”

Nonetheless, talking to the Macon Chamber of Commerce on Thursday, Boeing vice president and general manager for the 747 program, Bruce Dickinson said, the iconic airplane remains “a key part of our product strategy.”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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