07/09/2009 (6:39 pm)

Boeing will buy plant that makes parts for 787

Filed under: technology |

Boeing Co. will pay $580 million for a plant that makes large sections of its 787 jetliner, an apparent effort to rein in supplier problems that have led to costly delays of the next-generation aircraft and hurt the company’s credibility.

The plant, owned by Vought Aircraft Industries, makes barrel-like sections of the 787’s fuselage that fit between its wings and tail and are composed primarily of lightweight materials.

Deliveries of the 787 have been postponed by nearly two years partly because of problems with components made by suppliers and work that suppliers didn’t complete. Those hang-ups are expected to cost the airplane maker billions of dollars in added expenses and penalties.

Boeing took a new approach to building airplanes when it announced its 787 program in 2004. Instead of building the plane’s parts in the United States, it used suppliers around the world to build sections of the plane that are later assembled at the company’s commercial aircraft plant near Seattle. Ill-fitting parts and other problems have hamstrung production ever since.

Vought, owned by private equity firm Carlyle Group, says financial problems, not production glitches, prompted the sale, expected to close in the third quarter. Under Tuesday’s deal, Boeing will release Vought from obligations to repay money advanced earlier by Boeing.

Vought President and CEO Elmer Doty said that his company’s investment in 787 parts was far greater than expected, and that the financial demands of the program "are clearly growing beyond what a company our size can support."

But Richard Aboulafia, an analyst at Teal Group, an aerospace consultancy in Fairfax, Va., said, "This clearly is more about securing the supply chain and undoing numerous mistakes.

"It’s a good move, it’s a proactive move, it undoes some damage," he said. "But on the other hand, it shows this program still has more than a few challenges to overcome. … I don’t think Carlyle quite knows what to do with this asset, and they might not have been prepared to give it the necessary resources payday loans guaranteed no fax."

Despite those problems, Boeing spokesman Jim Proulx said Tuesday that the company had no plans to change its 787 production plan. "We remain committed to the business model and the global strategy for the 787," he said.

The mid-sized, long-haul 787 will be able to carry 210 to 330 passengers. Its design includes wider seats and aisles, larger windows and a ventilation system that will allow for higher humidity, all of which Boeing says will make the cabin feel more comfortable.

It’s Boeing’s first all-new aircraft since the 777 and the first commercial jet made mostly of carbon-fiber composites instead of aluminum. Boeing says it will be about 20 percent more fuel efficient than other planes of comparable size.

Boeing, based in Chicago, has booked orders for a record 850 of the planes, but some 60 have been canceled so far this year, including the cancellation of 15 and the delayed delivery of another 15 by Qantas Airways last month.

Adam Pilarski, an aviation economist with consulting firm Avitas, based in Washington, said Boeing might want the Vought plant, in North Charleston, S.C., as part of a plan to start a second 787 production line. The added capacity is in response to strong demand for the plane.

"Boeing made it very clear that they need a second line," he said. "They need it more now than they did before because they are behind."

It remains unclear when Boeing will conduct the first test flight of the 787, previously scheduled for the second quarter of this year.

Vought will continue to run other plants that work on different 787 components as well as parts for Boeing’s 737s, 747, 767, 777, C-17 and V-22 aircraft.

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