Boeing CEO Dennis Muilenburg often talks about business opportunities and challenges in terms straight out of the aviation industry textbook — tailwinds and headwinds.
Tailwinds propel Boeing toward bigger profits and increased cash flow while headwinds create a drag on the company’s bottom line.
With production of the 787 Dreamliner ramping up to 14 a month this spring, Muilenburg sees few forces stronger than Boeing’s popular twin-aisle jet assembled in North Charleston and Everett, Wash.
“If I think about cash, cash opportunity, cash growth (the) biggest tailwind for this coming couple of years is 787 productivity,” Muilenburg said last week during the Barclays Industrial Select Conference in Miami.
Boeing has chipped away at the deferred production expenses that plagued the 787’s early years — such costs fell $617 million in the fourth quarter to $23 billion, down from the original $28 billion.
With 39 Dreamliner deliveries in the fourth quarter, the math works out to an average $15.8 million profit on each jet — just three years after the 787 started making, rather than losing, money on each delivery.
Muilenburg is counting on the higher production rate and lower prices from suppliers — what Boeing terms its “Partnership for Success program — to drive the program’s cash flow.
The introduction last year of the 787-10, the largest Dreamliner variant, also gives the program “a favorable mix,” Muilenburg said. Built exclusively in North Charleston, the “Dash 10” is nearly identical to the smaller 787-9, so production costs decrease as more of those planes are sold versus the original — and smallest — 787-8 model.
“So
Article source: https://www.postandcourier.com/business/boeing-ceo-sees-sc-made-dreamliner-automation-as-keys-to/article_cb9710a6-360b-11e9-9b1f-87d09d2689b7.html
