Shanahan interview on 787

We had the opportunity to sit down today (Tuesday) at the Farnborough Air Show with Pat Shanahan, the VP and GM of the 787 program.

Here is the transcript of this interview.

Leeham: During the Investors Day conference and the April program update you indicated that there would be 25 deliveries in ’09. Are you still on track for that?

Shanahan: [After a short pause.] My hesitation is I need to look at the schedule situation and what the ramification of that is. At this point I’m assessing it. We’re still on track for first flight, first deliveries. Obviously, anything you do with moving those dates around has an impact on deliveries, so we’ll see.

Q. If I understand you correctly, there’s a possibility that you might not deliver 25 in ’09.

A. Well, there’s always the risk. That’s why putting a buffer into the schedule ends up, you know, I’ve to see where I am on my buffer.

Q. In the program update and investors day, you really didn’t detail what the deliveries are for ’10 and ’11. What are your anticipated deliveries, certainly in ’10?

A. We haven’t talked about any of those.

Q. Now is a good time to do that.

[Laughter all around.]

A. Yeah, yeah. You’d have to break both arms. Obviously we have schedules and deliveries planned. We’ve communicated those to the customers but we’re not ready to be so bold as to announce that to the world. One thing, I think we’re actually in a quiet period [ahead of the earnings announcement next week]. I can’t answer that. I think that will be considered material.

Q. At the Investors’ Day, I believe it was you—it might have been [BCA President Scott] Carson, mentioned a production rate of about two a month, but it really wasn’t put into context. Could you put that into context?

A. I think I didn’t put it into context because that would, I did, I did talk to some people off-line who were trying to figure out how to count the airplanes but at some point, we do get to two a month or higher rates. The only reason I’ve waited doing that is that we have to start counting all the airplanes, which is the goal, right? I’m trying to steer away from all these dates and deliveries because what ends up happening is you move anything around and somebody says you’re program’s not working.

It’s kind of the opposite. All these things are now converging. All the uncertainty that I was planning with before is now becoming certain. The things that I tried to parametrically identify didn’t have a basis of performance…. I feel now I’ve got my arms around the work statement, I have my hands on the controls. Now is the question whether I can move those controls as fast as I like.

After the interview, 787 spokesperson Yvonne Leach called to follow up on Shanahan’s discussion of 2009 deliveries.

“I wanted to clarify one thing,” Leach said. “Pat kind of went on and on about the buffer. We are going to have 25 deliveries in ’09. The plan is the plan. Pat kind of answered in a roundabout way. I just wanted to confirm the 25.”

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