Boeing loses $26-mn on every Dreamliner 787
25 Jul 2015
Boeing is trying to reduce the losses, it incurs on every 787 by cutting down on the use of one of its signature ingredients - titanium.
The aircraft costs on average around $26 million more to build than the sale price.
The strong, lightweight alloy, which is used extensively on the 787 costs seven times more than aluminum, and makes up about $17 million of the cost of the $260 million plane, according to industry sources.
The titanium cost paring formed part of a broader effort by Boeing to make the 787 profitable and included pressing suppliers for price cuts and adjusting assembly lines to improve efficiency, according to Bob Noble, vice president of Partnering for Success, Boeing's supplier cost-cutting programme.
Other Boeing commercial planes were profitable and on Wednesday, Boeing repeated its pledge to break even on the 787 this year on a cash basis. With titanium making up 15 per cent of the 259,000 pounds an empty 787 weighed much more than other Boeing jetliners.
According to industry experts, the material was under special scrutiny.
The world's largest plane maker had not disclosed how many billions it invested to develop the 787, which was introduced in 2011, but it had spent over $30 billion on production, tooling and one-time costs. It had also shelved plans for new planes. According to former chief executive Jim McNerney, last year Boeing did not plan any more ''moonshots'' like the 787.
Meanwhile, Boeing has named Mark Jenks, as the new head of its 787 Dreamliner programme, replacing Larry Loftis who retires at the end of this month.
Jenks is currently Loftis' deputy and has worked on the 787 since the programme got underway and led the smooth development of the second model in the Dreamliner family, the 787-9.
Unlike its predecessor the 787-8, the larger model was on schedule and had fewer development problems.
Jenks' key task would now be to bring down the manufacturing cost of the jet.
He would need to do this as Boeing prepared to close down a temporary assembly line in Everett, correspondingly increasing production on the other two assembly lines, one in Everett and one in North Charleston, South Carolina.
At the same time, manufacturing would need to gear up for increasing the rate next year from 10 jets per month to 12.
He would also need to oversee the introduction of the third and largest member of the Dreamliner family, the 787-10, scheduled to enter service in 2018.
