Boeing May Face Penalties for 'Dreamliner' Delays

Production of Boeing's 787 "Dreamliner" jet has been delayed. The company outsourced most of the production work on its massive plane and underestimated how long completion of that work would take. Eight-hundred jets are on order, and Boeing now says the first of the planes won't be ready until early next year.

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MELISSA BLOCK, host:

Global supply issues are at the heart of the Boeing Company's latest woes. The company announced today that production of its new 787 Dreamliner jet is being delayed even further. It was already behind schedule.

ROBERT SIEGEL, host:

The 787 is designed to be quieter and more comfortable for the passenger and also more fuel efficient, and airlines have been eager to buy it. Boeing already has 800 orders.

BLOCK: But Boeing outsourced much of the production work, and the company says some suppliers have not met expectations. Boeing also says they underestimated how long it would take to finish someone else's work. Pat Shanahan heads the 787 program. He spoke to reporters on a conference call this morning.

Mr. PATRICK SHANAHAN (Vice President, General Manager, 787 Program, Boeing Commercial Airplanes): We designed our factory to be a lean operation. We thought we could modify that production system and accommodate the travel work from our suppliers. We were wrong.

SIEGEL: Japan's All Nippon Airways was supposed to get the very first 787 in May. Now, Boeing says that airplane won't be delivered until early next year, and the company will probably have to pay millions in penalties to airlines whose new 787s won't be ready when promised.

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