All across Boeing's
Last week, the aerospace giant renewed its commitment to deliver the first 787 Dreamliners to customers this year. After years of delays, supply chain snafus, and labor strikes, Boeing's affirmation that it remains on track and on schedule with the project comes as welcome news.
But it wasn't the only good news Boeing had to report. Yesterday, management advised that it's upping the rate of production on its more workaday 737. They're being produced at the rate of 31.5 planes per month, and Boeing intends to begin building 34 per month -- in 2012.
Which sure sounds like good news. At a list price of roughly $69 million per plane, the accelerated production promises to add as much as $2.1 billion to Boeing's annual revenues. On the other hand, we won't actually see those revenues for another two years. So, why tell us about it now, when even Boeing admits: "The production rate decision is not expected to have a material impact on 2010 financial results"?
Well, there's the obvious reason: To give a heads-up to 737 suppliers like General Electric
Second, Boeing's showing confidence that as the global recovery takes hold, big 737 buyers like AMR Corp. and Continental here in the U.S. and Ryanair abroad will lead to an industrywide "return to profitability in 2011," giving rise to "an increased demand for airplanes -- especially in the market served by the Next-Generation 737."
Quit flashing your billfold, Boeing
Still, from where I sit, Boeing's boasting seems ill-timed. Over in California, workers at the Boeing C-17 assembly line have just gone on strike. In Missouri, 2,600 members of the machinist union are preparing to join them on the picket line.
Sure, some will argue that defense workers and commercial aircraft workers are two entirely different animals. But the fact remains, they both work for Boeing. Any argument Boeing makes to the one group about why it needs hiring-and-firing flexibility to cope with an unruly economy gets undermined when Boeing starts flashing cash and going around telling everyone how its commercial business is booming.
Seems to me, in its battle over labor concessions with its defense workers, Boeing just handed a case of ammunition to the opposing force.