Expecting to begin flying spiffy new 787 "Dreamliners" years ago, inaugural 787 customer All-Nippon Airways has been kept waiting three years for delivery of its promised jets. Russia's Aeroflot was recently forced to buy more Boeings (albeit 777s) to fill a gap in its people-hauling capabilities created by missing 787s. Meanwhile, here at home, Delta
Ever since Boeing began having "issues" with its 787 "Dreamliner" project (which if memory serves, was around about 350 B.C.), speculation has centered on how delays in production might affect Boeing's customers -- and how they would react to the delays. Numbers are vague, but most analysts agree that the terms Boeing agreed to when inking its sales contracts obligate it to pay penalties in the billions of dollars for tardy delivery.
And now comes even worse news ... this is only the beginning. In focusing on Boeing's angry customers, we forgot about the other end of the supply chain: Boeing's frustrated suppliers.
Spirit says "Boo!"
Because as it turns out, Boeing suppliers like Precision Castparts
Neither Spirit nor Boeing are commenting on the specifics of their "agreement," on the precise nature of Spirit's "claims," or what financial impact these claims might have on Boeing. But Spirit does tell us that it "expects to include any impact of the agreement in its Fourth Quarter and Full Year 2010 Financial Report planned for February 10, 2011."
Which I think you'll agree, seems to imply there will be an impact -- one that will benefit Spirit (it's shares leapt 10% on the news by the way) and one that will hurt Boeing. Although curiously, Boeing itself was up 2% on the news as well.
The only question remaining: How much must Boeing pay Spirit for its delay ... and which 787 supplier going to ring Boeing's register next? Stay tuned -- Boeing's earnings are due out January 26.
Precision Castparts is a Motley Fool Stock Advisor recommendation, and Spirit AeroSystems is a Motley Fool Hidden Gems selection, but Fool contributor Rich Smith does not own shares of (nor is he short) any company named above. The Motley Fool has a disclosure policy.
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