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Tuesday, February 19, 2013

Boeing's "Business As Usual" Is ... Well, Maybe Not

On January 31, 2013, I suggested that Boeing's "business as usual" attitude with regard to the flaming batteries would come back to haunt them.
Boeing plays down 787 woes; net falls 30%. The company says it is "business as usual." Something tells me they will regret that "que sera sera" attitude. Oh, by the way, from CNBC this a.m.: the term for Boeing 787  lithium batteries that start on fire: "non-passive failures."
So, tonight this story, Reuters is reporting:
A month after the global fleet of the carbon-composite jets were grounded as U.S. and Japanese regulators carry out investigations into overheating batteries, the parked airliners are a stark symbol of deepening problems this is causing Boeing.
At Paine Field in Everett, Boeing plans to move some of its other planes around to make room for new 787s coming off its two production lines, and says it has room to store all the 787s it is making.
But Boeing is finding it increasingly difficult to convince Wall Street that its balance sheet is not going to be strained by the crisis. Until the Dreamliner is cleared to fly again, which could be several months, Boeing will be starved of delivery payments but still has to keep producing and maintaining the 787s it is making.
The world's largest planemaker is being hit on a number of financial fronts, as well as suffering potential damage to its brand image. It is unable to deliver the five Dreamliners being produced per month, missing out an about $200 million in final cash payments from customers every month the 787 is grounded, while it has to pay out millions of dollars to clean, maintain and insure the parked planes. The delay may also force Boeing to postpone plans to double production by the end of this year.
And Boeing engineers, this week, are voting whether to go on strike. 

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