by Burke Speaker | February 11, 2014 8:56 am
The Boeing Company (BA) is being threatened with a backlog of 787s that could slow output and potentially impact BA stock.
Insiders say that two factories that assemble the Dreamliners are under pressure with a ramp-up in production that began at the end of 2013.
A significant backlog of work may decrease production output in 2014.
“While we try to minimize it, traveled work is something we deal with in all production programs,” Boeing spokesman Marc Birtel to Reuters. “The 787 program remains on track to meet its delivery commitments in 2014 and we are producing 787s at a rate of 10 per month as planned.”
Boeing’s plant in North Charleston, South Carolina, cannot finish thousands of work orders and is sending pieces to the larger plant in Everett to be completed so that the company can maintain its 10-a-month rate, according to four employees who spoke on condition of anonymity. A work order can be as simple as attaching a part or as complex as installing a duct system.
A senior employee in Everett said the problem is particularly acute with the jet’s complex wiring: fuselage sections were arriving from North Charleston with large bundles of wires that were not connected properly.
The South Carolina workers have the skills to produce the plane correctly “but there are not enough of them to match the rate increase,” the senior employee said. “They can’t keep up.”
Boeing admits to knowing the issues at hand — and promised to work to fix the problems.
As for BA stock, the company’s 2014 outlook has been somewhat of a drag to investors — especially after an 80% in 2013.
Boeing shares are down from their 52-week high — and down 6% year to date.
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