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Boeing enters Singapore Airshow ‘de-risked’

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The manufacturer believes it is in a strengthened, more stable position.

Boeing chairman and CEO Jim McNerney believes the company’s Commercial Airplanes unit enters this week’s Singapore Airshow—and the decade ahead—in a “de-risked” position compared to the past 10 years. Both the technological risks involved in developing the 787 and the periodic bouts of labor unrest that beset Boeing in the recent past have been left behind, leaving the manufacturer in a strengthened position as it re-engines the 737 and produces new derivatives of the 787 and 777, according to the Boeing CEO.

Speaking to analysts and journalists during a recent conference call to discuss the company’s 2013 earnings, McNerney noted that developing and producing the 787 put the company out on a precarious technological limb. He has acknowledged this before. “We go through eras [in aircraft manufacturing] where we get excited by new technologies,” McNerney said last year. “As you take the first bite of that apple, you tend to be on the leading edge for a while. That was where we were on the 787.”

This resulted in multiple Dreamliner program delays and, most prominently, in the grounding of the worldwide 787 fleet by FAA for more than three months in 2013 while Boeing developed a fix for the ultra-modern aircraft’s battery system. But all of the trials and tribulations involved in testing, developing and producing the 787-8 mean Boeing now fully comprehends the technologies involved in manufacturing the -9 and -10 derivatives of the Dreamliner, McNerney said. Boeing’s better understanding of the 787’s technological leaps—and lessons learned from the 787-8’s various problems—will also help in developing and producing the 737 MAX and the 777X, he added.

Indeed, one reason Boeing decided to re-engine the 737 in 2011 rather than launch an all-new narrowbody aircraft was its calculation that, particularly in the aftermath of the 787 program’s delays, it couldn’t afford—financially or technologically—to launch another completely new aircraft program so soon. McNerney said in 2011 that a big factor weighing against an all-new narrowbody was “not having all the answers we wanted on a production system,” adding that re-engining the 737NG was a “low risk, low capital” alternative to an all-new aircraft.

During the recent conference call, McNerney said, “My view is the next 10 years are significantly de-risked compared to the last 10 years … Technologies from the 787 are now harvested and matured … That doesn’t mean [the 737 MAX, the 787-9/-10 and the 777X] are free-throws.”

But, he added, “The 737 MAX is basically the same [production] line” as the 737NG with new CFM International LEAP-1B engines added. And “the 777X will use the same [production] line” as 777s currently being built, he said. The 787-10 “is really a stretch of the -9,” which has already had its first flight, McNerney noted.

In addition, ratification in early January of Boeing’s agreement extending its labor deal with its more than 30,000 commercial aircraft manufacturing plant workers in the Seattle area to 2024 eliminates the possibility of a disruptive work stoppage and cements 777X production at Boeing Commercial Airplanes’ facilities in the state of Washington. “We’re exiting a period where every few years we had a dramatic [labor] event and we’re entering a period of 10 years of stability,” McNerney explained.

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