Boeing 787 Output In S Carolina May Top Target

April 30, 2012

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Boeing believes its new South Carolina assembly line for the 787 Dreamliner can hit or even exceed its production rate target of three planes per month, Boeing chief executive Jim McNerney said.

"We will identify upside to that when they prove the three per month. We're highly confident they will," McNerney told reporters after the company's annual shareholders meeting in Chicago. "I believe that there can be some upside to that."

Boeing's commercial orders have grown rapidly this year, while production has accelerated on all its commercial planes including the 787. The new lightweight carbon-composite airplane came to market in 2011 after three years of delays due to problems in the global supply chain.

Boeing aims to make 10 787s per month by the end of next year. Three of those planes will be assembled in Charleston, South Carolina. The other seven are to be assembled at Boeing's primary factory in Everett, Washington.

The plane, which promises fuel savings and passenger comforts, is a hit among customers, who have ordered more than 800 787s.

Some analysts have expressed doubt that Boeing can increase 787 production to 10 per month by the end of 2013, especially after the discovery of a manufacturing error in February.

That error - a problem with the shimming of laminated parts of the fuselage - originated in the South Carolina plant. Boeing has said it has solved the problem and that it will not be repeated. The first 787 rolled off the South Carolina assembly line on Friday.

STRONG DEMAND

Demand for new commercial planes is growing, McNerney told shareholders at the meeting. In particular, he cited demand for the upcoming 737 MAX, which is an upgrade of the current 737 narrow-body with fuel-efficient engines.

Boeing has taken more than 1,000 orders and provisional orders for the MAX since winning its first provisional order for the plane from American Airlines last year. Southwest Airlines will be the first operator of the plane.

Boeing's MAX competes with the upcoming Airbus A320neo, which also will feature new engines.

"I'm pleased with the order uptake. It's a little bit better than we had originally projected," McNerney said. "And we're just going through the normal process of converting commitments."

Boeing is ramping up production of commercial planes to meet increased demand from airlines while it faces pressure from reduced US military budgets.

Boeing last week turned in a stronger-than-expected quarterly profit.

(Reuters)