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Why Boeing Keeps Losing Money on Each 787 Dreamliner

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Amid all the fine financial news Boeing (BA) can tout—a record order backlog, robust profit margins, a higher profit outlook—one of the airplane maker’s dreariest performers continues to be its highest-tech, most fuel-efficient product: the 787 Dreamliner. (www.businessweek.com) עוד...

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pjtemplin
Pete Templin 2
Where in the article did they actually say WHY Boeing keeps losing money?
preacher1
preacher1 2
Well, we did not have the instantaneous scrutiny in the mid 90's for the 777 nor in the late 60's for the 747 but it was there as were these same issues. Cost on any new aircraft have to be put out there somewhere and a breakeven date of next year has long been out there. The 787 is running a little higher due to outsourcing and the battery deal but it is now on track. Wall street and the media will just have to keep there pants on.
joelwiley
joel wiley 1
(Income - Expenses) < 0, and other accounting tricks.
VKSheridan
VKSheridan 2
Gillette had a saying, "Give away the razor so you can sell them the blades".....Boeing taking a loss on the build to lock customers into purchasing proprietary parts is hardly a fool's errand. Boeing dictates the price, they understand the costs and since this isn't their first rodeo, it's a sure bet they understand the long term income that will come from selling these at a price appeal too hard to refute.......
bergk
Ken BERG 1
Smart buyers will set parts pricing standards in the contract for the plane. Like Boeing probably did with all their suppliers of parts around the World. Or did they??? Ken
jbayter
jbayter 1
One more time, I did no have time to check for gramma !
jbayter
jbayter 1
I meant "that does not make a good plane" refering to Airbus!
My bad, I did not have time to check for gramma...
jbayter
jbayter 1
Boeing keeps loosing money? Think about it... The biggest opponent for Boeing is the US MEDIA, they are paid to spice up debates, and make up rumors about Boeing going down the hill.
Now Boeing not only builds commercial airplanes, war birds, unmanned, helis, owns jeppessen (most used charts around the globe), Honywell,etc Boeing is also sharing projects with fast growing builders like Embraer and a few others.
Now let's talk about quality control, yes we all know they had problems with the union and engineers were "not doing their best", and all that. --they got over it-- Do you ever wonder why Airbus problems never see the light so bright like Boeing Does?
First European media is not self destroying like the ones we have in US. Just mention a couple of Airbus problems:
Main wing spar cracks in the A380
Engine severe damages(fans not Able to rotate during flight)
Flight control computers not receiving pilots commands,
Crucial sensing devices not performing properly under icing conditions (even the certificated ones)
And so on...
Emirates airlines reps. in a job fair stated "we regret buying A330, what a scam" refering to my friend experience as a capt. In 330 (almost 3000hrs on type) he was offered a right seat on the 380 she further explained they want to get rid of the 330, and buy more 777.
Now, as a pilot if you ask me what kind of emergency Do I prefer? I will none, but if I have to choose from a battery catching fire or engine failure and a main wing spar structure failure, or loss of control. I would take the firs two without any doubt!
You will never, ever find a plane without issues, they are human made!!
I will always pick my American, robust and confident plane= Boeing.
Airbus is not a bad deal, but the only reason they've been selling s much planes it's because they are always on sale, get 1.5 pay 1(for real) the are cheap to maintain, transitions or upgrades are very quick, and so airlines love them, that does make a good plane, that makes a plane loveable for the airlines, since they are cheap to run, don't worry Boeing is catching up!
By the way a350 it's a vulgar copy of the 787
Beermonster54
Phil Hall 2
A very long winded and pointless argument.
Boeing making a loss has nothing to do with Airbus!
Boeings problem is this, if you sell your wares for less than it costs you to make them you will have a negative balance sheet.
You don't need a university education to understand this yet for some reason Boeing still do not.
jbayter
jbayter 1
Yeah, ok... Lets call it pointless!
My pointless point is, Airbus is doing as good as Boing! And they are NOT winding up, and make a whole mess out of it!!!
And refering to the last part of your comment, trust me we all together would not be able to give and advice to Boeing, they have been in the business for I believe quite a long time we are not going to teach them how is done, and "other companies" neither! Have a Great day PHILL and lets get back to what we do !
jbayter
jbayter 1
Morning Phill! May be I do have a point, may be be you just did not get it! Let's say I wasn't clear enough! What I meant, is that Airbus is doing as good as Boeing, during the last quarter Boing was even on top of Airbus! And we don't have to be geniuses to find out, go to "stocks" on your iPhone, type EADSY and you will be able to get quite a few details on the matter... No back to he subject, my point is Airbus is doing as good as Boeing and their European Media is not going all around the globe winding the whole thing up, nor making a mess out of it!! Compared to the US media. In addition, my humble opinion is: let's take pride of what we do, and Boeing is by far a better plane builder they just are NOT as cheap as Airbus! And refering to why Boeing keeps on selling planes if they are "supposedly" not earning a penny from it, believe my and we don't have to agree on this even if we are born again we won't be able to understand how this industry works, they spend our lifetime in money to hire people for a year that does have the skills to work this out, I believe they have been in the business quite a long time, so I'm pretty sure they know what they are doing! Now let's go back to what we know to do, and let them do their thing. And once again the 350 it's a vulgar copy of the 787!
Beermonster54
Phil Hall 1
The title that heads this page is,
"Why Boeing Keeps Losing Money on Each 787 Dreamliner?"
Now look closely at the title and text. It does not claim or even suggest that Boeing are not doing as well as Airbus, in fact Airbus do not even get a mention until you and your American bias introduce the name in your long winded and pointless answer.
Read very carefully before launching a very partisan tirade against a manufacturer who has done nothing to deserve it.
akayemm
Er.A.K. Mittal 0
The losses could be more if one considers the repairs/modifications involved on account of complaints of mal functions of various types !
linbb
linbb 1
No different than Airbus with the 380 and others that don't get as much press as here. The AI problems are there own doing due to poor mechanics trying to band aid them together. Also I guess that you meant malfunctions. All new aircraft and some old require ongoing mods or ADs complied with if you do a little research.
s2v8377
s2v8377 1
True, but the media is the media. My expectations for them are pretty low!!!
s2v8377
s2v8377 -2
I am not an Airbus guy!!! However Boeing has nobody but themselves to blame for their problems and financial losses associated with the 787 program. The only way to fix Boeing would be to:

-Fire their money hungry board and senior management.

-Learn how to ignore Wall Street profit expectations, and worry about building quality planes!!!

-Bring production of their aircraft components back in house.

-Close the Carolina Plant, or bring in qualified aviation industry union workers in to build the 787's at the same salaries/benefits paid in Washington State.

-Instead of pocketing their profits reinvest the money back into research and development.

-Take quality control seriously.

I used to love Boeing jets, and frequently used the term "If it isn't Boeing I'm not going". The 707 - 777 were all amazing examples of commercial aviation, but I feel Boeing has lost their way. Very sad :(
Lunarstorm777
(v)e Same 4
Well, if this city is any indicator, that plant is already full of qualified aviation workers.... The ones from seattle and everywhere else in this country moving here in swarms.. Its the irony of these "Were creating jobs" crap promises from business and politicians. Oh sure, they're creating jobs alright, jobs for transplants that wanna move here anyway. "Relocate to the Carolinas! Leave your one bedroom broom closet in seattle and buy a veritable mansion!" Lets be honest, it doesn't take a PHD to assemble 90% of an aircraft, if the plant needs to be fixed, Boeing needs to replace management (Cause that never happens haha). Just look at BMW, they just dropped another $1 billion to expand their GSP plant and make it their largest in the world. If they can iron out the kinks, Boeing is certainly capable... But the question is, will they?
pjtemplin
Pete Templin 4
Wow, dude. Settle down. Boeing does build quality planes, they just don't do 100% of the assembly steps right the first time when it comes to the 787. It all gets caught by quality control, which is most likely why they're taking so long from rollout to delivery, and why this article was published. They are serious about quality.

If you read the article, you'd see that they actually are missing Wall Street expectations when it comes to the 787, and they are putting a lot of money into deferred production costs (which is essentially R&D) for the 787, as well as developing the 737 MAX, 777X, and who knows what else.

And why oh why are you saying that the only way to fix Boeing is to close the Carolina plant? Seriously, what's so "wrong" about the plant that can't be FIXED and you claim that it needs to be CLOSED? And why would you claim that the only way to fix it is with union workers? Go ahead, show us WHY a non-union worker CAN'T be as good as a union worker? Good luck with that. Also, why would paying the same salaries/benefits as Washington State fix Boeing? No, I think that's designed to fix your wallet.
gzelna
Greg Zelna 2
As a career non-union avionics design engineer I do tend to agree with the question as to why hiring union (anybody) specifically over non-union would bring about any notable change in the quality of product produced. All of the companies I have worked for produce world class systems - we do have (Also high quality) competition of course (and IDK if they are union companies, or not) but our systems are on par, or better, than everything else available worldwide.Repeat, we are non-union. I do believe unionization will add cost to the product produced, however cost does not necessarily equal quality. Also, I don't know of any companies who do NOT have regionally adjusted salary structures- higher cost of living, higher salary for the same job grade/description and the opposite also being true, lower cost/lower salary (same job).
RRKen
Kenneth Schmidt 1
". It all gets caught by quality control " The point of quality is that you produce a product correctly before one has to "catch" something. If you have to inspect every item, then the process for producing said item is at fault or you do not have a process at all.

Control the process, you control the product.
s2v8377
s2v8377 0
They don't have to close it but they certainly have fix it on the facility in Carolina's. I have no problem paying more for a good product being built by a union workforce. (Yes, I know pretty much everyone that posts on this website thinks unions are evil, but I don't)

I don't blame the Boeing workers on the floor but the current corporate culture in this country for the quality control issues. Plus these type quality control issues are not unique to Boeing I may add with our current corporate culture. In addition the majority of their quality control issues are with third party contractors which is why the 787 has faced such challenges. If the parts were being built in house this would have been a much smaller challenge.

The 737MAX program should have been the 797. Also there never should have been a 747-8 to ensure capital to pay for the 797's development. I don't want to hear Boeing couldn't afford it either, as they've already proven it could be done with the 767/757 in the 80's. I think my point on the 737MAX has also been proven by the sales of the A320NEO program.

I also closed with the point that I overall I think Boeing has built some excellent commercial aircraft, which have proven to be far superior to Airbus over the last three decades. I just hope that continues to be true going forward.
gzelna
Greg Zelna 1
Agreed, as they say on the Boeing Plant Tour, "if it aint Boeing, I aint going..." The development/deployment of the 87 was really under a media microscope, and essentially a first of a kind type build with the to-be-expected glitches (not to mention all the outsourcing, which also REALLY bit them it seems) - You have to be sure AirBus on the competing 350XWB program has been watching and probably learning a lot of the difficult and expensive lessons learned on the 87 development. Again, one must assume this is the case. And of course we don't have the intense scrutiny in US mainstream media of an AC development program across the pond.....
Corporate Culture wise, thats a sticky one....! I by choice have remained a 'individual contributor' and not manager since I like to create, build, see the results.... Living with 'quality' and sometimes lack thereof, it MUST start with the design (which starts in turn with a management culture permitting/committing, or in some cases not, resources of time/talent/dollars sufficient for the task). There are times you proceed based on a heckuva lot of simulations/analysis data, prototypes , etc with near certainty for success, and others (due to compromises made usually due to schedule or budget constraints) you proceed with some known risk. It has always been a back-n-forth relationship between design and the bean counters... Probably always will...
RRKen
Kenneth Schmidt 1
"if it aint Boeing, I aint going..."

That means you limit yourself to where you are willing to go in the world. More than 50% of the commercial flights in the U.S. alone are made without Boeing products. Suit yourself.
jbayter
jbayter 0
Hey Phill do your self a favor and forget about it! If you don't think so then that's ok! But if read more than the title you might be able to get it. Just forget about its not not worth it!! It's all about the media and winding boeing issues and not Airbus Issues when they both have engineering problems as usual! If I'm not clear enough then forget about it and have a nice beer!

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