Note: It’s been a heavy travel year already for us and we are off again through July 24. We won’t be posting during this period. Any Comments submitted by people who haven’t previously posted will be delayed in posting until our return.
Boeing’s earnings call for 2Q09 is July 22. Since we will be traveling and won’t be providing our usual running reporting of the call and our concurrent take, we thought we would highlight a few things we think should be asked about by aerospace analysts and reporters.
- Progress in fixing the wing-to-body join that delayed the first flight;
- New schedule to first flight, certification and first delivery;
- Number of affected airplanes; (Boeing told us fewer than 40; reconfirmation);
- Is the fix described on the conference call indeed the fix that will work? Further design study and validation was required, it was said on the call.
- When will a decision be made on Line 2? (Seattle papers report a decision will be made in the fall.)
- Is a no-strike clause with the IAM conditional on placing Line 2 in Everett (Seattle), as Washington Members of Congress quote Boeing executives (specifically McNerney) as saying?
- Will Boeing accept an arbitration clause in return for a no-strike pledge?
- What further economic incentives are important to Boeing?
- What cities are under consideration for Line 2? Reports indicate Everette, Charleston, San Antonio and a fourth city, perhaps Long Beach?
- Once a decision is made, how long will it take to make Line 2 operational, at Everett? at Charleston? at San Antonio? at Long Beach?
- What is the “block” for 787 cost allocation? That is, the 747 program has a “block” beyond which losses must be recorded (so far, $1bn, excluding any additional write-offs in 2Q09). The 787, like all Boeing aircraft programs, uses Program Accounting. Has a “block” been identified beyond which cost overruns on the program so far will have to be written off?
- McNerney used to reveal the additional R&D money added to the 787 program, but has not once it reached $1.5bn. What is the current R&D/production overrun on the 787 program?
- Boeing ended 1Q09 with $4.4bn in cash. Watch for the cash level that will be announced for the 2Q09 quarter. In this context, Boeing will pay Vought $580m in cash to purchase the Charleston facility: how will this be funded by Boeing? Out of cash? New debt?
- Executives will likely give an update on this program. Analysts and reports should specifically ask about the GEnx SFC fuel consumption. We hear this is several percentage points over the SFC target. (This also applies to the 787 GEnx version.)