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787. Fly by years end? What year? 2011!

I had originally published a running transcript on another site, but here is the official full transcript.



Since I can't believe it cost Boeing $900 million a frame to build ZA001, ZA002 and ZA003, I am guessing the $2.5 billion worth of costs they are charging to those three planes is some type of accounting measure to apply costs from the entire program onto only three frames in order to improve the financial position (from an accounting basis) of all the delivered planes?

And if so, does anybody know what these costs would be? I imagine it includes the additional R&D costs, but would it also include all the extra payroll hours to complete the travel work on the initial planes? And perhaps compensation payments on the 100+ planes that Boeing had planned to deliver by the end of this year? Payments to suppliers to support operations?

And does anybody know what Boeing spent the $138 million on for those planes? Is this the cost to install the fix? Which means the next three planes will need somewhere around that much spent to install it on them? ZA100 will likely need a similar per frame spend since it's already assembled. I don't know how many other planes have had their wingboxes joined. Is this handled at Global Aeronautica, or is it performed in Everett?

Stitch,

How do you get insight into Boeing's official books?

Seems to me you are guessing about things on which you don't have facts.

If Boeing were to try to do some of the things you intimate, Jim Mc Nerny would be in jail.

I'm asking questions, Ron, not making statements.

Boeing stated the $1 billion charge to the 747-8F program broke down as $640 million to cover additional costs to fix production issues due to some of the parts being built out of specification and therefore not fitting. So some of that money comes from replacing the bum parts on the first three 747-8Fs in production, some comes from binning any other parts already built for future 747-8Fs, and the rest comes from re-designing the parts so they actually fit and then manufacturing them. The remaining $360 million covers the expenses generated by only building and delivering less 747-8Fs during the first two years of production than originally planned.

But Boeing hasn't said (that I can find) what the $2.5 billion charge to the first three 787s covers other than it supposedly covers the "lost value" of the three planes because they can't be sold. But that doesn't make sense to me. Is Boeing claiming each of those 787-8s is worth almost $900 million? If they are, then why were they given a list price of $120 million and sold for around $90 million - one-tenth their "value"?

So I am asking if anybody knows, and offering some things I feel might be possible reasons. Maybe I shouldn't have offered an opinion and just asked an open-ended question. I'm not accusing them of doing anything illegal or unethical. Airbus did something similar with the A380 program, writing down the costs of the wiring issue across some or all the 24 affected frames, so it's clearly not an unethical or illegal accounting move.

If anyone knows the answers you want, they would be absolute fools to tell you as they would shortly lose their job for giving away privileged information. You are going to just have to continue to make WAGs.

So why did Boeing detail the charge for the 747-8F then if it's supposed to be "privileged"?

Because Boeing wanted to do so, other information remains privileged until Boeing (read that CEO or other senior managers reporting to the CEO, BOD) decides to make it public. If an employee provides such information without senior management approval they would be looking for a job shortly. A stockholder could I suppose ask such a question at the yearly meeting and see if it was answered then but I doubt it, unless Boeing would see a benefit for Boeing to do so.

Flight Global is reporting that Boeing has completed the final design for the side of body and the fabrication of the remaining stringers (#2, #3, #4 and #5) will be underway shortly.

And the 787 will fly before the end of they year!