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SEATTLE—Boeing Co. delivered 23 percent fewer aircraft
in the third quarter as the world’s No. 2 commercial
airplane maker shuttered operations for most of last
month because of a strike by machinists.
Shipments reached 84 planes, Chicago-based Boeing said
in a statement. The total is down from 109 built in the
same period of 2007 and puts the company further behind
in its plan to surpass larger commercial rival, Airbus
SAS, this year. Separately, chief executive officer Jim
McNerney told employees Boeing has so far seen “little
to no impact’’ from the worst financial crisis since the
Great Depression.
Boeing
hasn’t been able to build planes since 27,000 machinists
walked out on September 6, demanding more job security
and higher compensation. Prior to the strike, the
company had sped up production in its Seattle-area
manufacturing hub to meet record demand from airlines
eager to replace their aging fleets with newer, more
fuel-efficient aircraft.
Boeing
delivered 67 737s, which are the world’s most widely
flown plane, along with four 747 jumbo jets, two 767s
and 11 777s in the quarter. Deliveries are important
because planemakers don’t book profit from a sale until
the airliners are shipped.
Boeing
had an order backlog for 3,696 planes as of the end of
August—enough to keep machinists busy for more than
seven years. The company has been building about 40
planes a month and had a target of delivering 475 to 480
jets this year. In the nine months through September,
325 aircraft were shipped.
Airbus,
which will announce September deliveries on October 7,
had shipped 315 planes through August. The Toulouse,
France-based planemaker has beat Boeing in deliveries
every year since 2003.
The
credit crisis hasn’t hurt Boeing’s daily operations
because the company has enough cash and isn’t
overburdened by debt, McNerney said in an e-mail to
employees on Thursday.
Still,
commercial customers “may have a harder time getting
financing to lease or buy new airplanes—and will pay
more for it,’’ he wrote. “Thus far, we’ve seen minimal
impact and nothing to change our fundamental assumptions
for delivering our record backlog. But we stand ready to
help our customers, if needed,’’ with financing from
Boeing Capital Corp.
There
has been a “very slight increase’’ in customers asking
about the possibility of financing their purchases,
though none have actually requested help yet, McNerney
said.
Some
carriers have canceled or deferred their orders this
year as they’ve battled record fuel prices and the
weakening economy. Southwest Airlines Co., the largest
low-fare carrier, said this week it will take just 10
Boeing jets on order for next year, almost a third fewer
than planned.
“The
ripple effect of the crisis could further slow the US
and world economies, which in turn could lead to reduced
air travel worldwide,’’ further damaging the “fragile
health’’ of airlines and reducing demand for Boeing
products, McNerney said.
While
Boeing hasn’t seen mass cancellations yet, “it’s really
important that we keep our costs low to help customers
operate efficiently as they face the risk of further
economic weakness,” he said.
McNerney
didn’t directly address the strike in his message. The
company has contended over the past few months that it
needs to remain competitive so it can’t give in to
machinists’ demands for higher raises and more
health-care coverage than Boeing had offered for a
three-year contract.
Workers
rejected the offer, saying that amid the unprecedented
level of orders and deliveries, they deserved a bigger
share of the company’s record profits, as well as more
of the work that had been given to outside vendors.
Military
programs, which have been largely unaffected by the
strike, also may be hurt by the financial crisis. About
half of Boeing’s revenue comes from defense.
“Our US
government customers may find that paying the bill for
rescue legislation could crowd out some US defense
spending,” McNerney wrote. “It’s unrealistic to think
there won’t be some measure of impact.” (Bloomberg) |
