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Can Boeing Soar on Stepped-Up 787 Role?

Ideally, for Boeing, the week's events would bring a perceptual change resembling what happened when competitor Airbus took its A380 on tour for demonstration flights in the spring of 2007. Suddenly, the airplane's image went from colossal failure to engineering marvel, albeit one that fell two years behind its initial delivery schedule.

Over the following eight months of 2007, Airbus received 33 new A380 orders, about a sixth of the total orders to date.

So far, Boeing's share price does not reflect a turnabout in perception of the 787's progress. Delivery delays largely explain a decline from near $108 in July 2007. The stock was at $75 in recent trading Monday afternoon.

Current trading also reflects the perceived possibility the U.S. Air Force may reconsider awarding a $35 billion contract for maintenance of refueling tankers to Northrop Grumman (NOC - Get Report) rather than Boeing.

A Complex Process Gets Underway

In retrospect, it seems Boeing was initially overly optimistic about the speed with which it could design and implement an innovative 787 production process, one that involved manufacturing and assembling components around the world, then shipping them to the company's home base in Everett, Wash., for final assembly.

"Boeing anticipated a startup like others, [but] this is the first time Boeing has not done a lot of the work it normally does," said Romero, a Boeing veteran who has run the Vought plant since October. Her predecessor resigned in June to pursue other opportunities.

"We are building a complicated piece of machinery," Romero said. "Boeing is using an extensive model for supply chain and it has taken some time to work out. But it will come out fine."
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