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TheStreet Open House

Boeing Rolls the Dice With New 787 Plant

Updated with share price.

SEATTLE ( TheStreet) -- Say this for Boeing (BA): The aircraft maker seems to love taking risks.

It's an odd trait for a member of a duopoly, one of just two companies in the world that makes big jet airplanes. You don't see duopolists like FedEx (FDX) and UPS (UPS) taking huge risks. They are too busy printing money.

Boeing, by contrast, gambled heavily as it planned development of the 787, starting in 2002. One new concept was the airplane's structure, largely composites. Another was a widely scattered, global production process that Boeing now admits was overly ambitious, primarily because oversight was lacking.

>> Photo Gallery: 787 Dreamliner to Fly by End of 2009

When the project fell too far behind schedules, Boeing upped the ante even more by pulling engineers from the 747-8 freighter, another new plane that was being developed, pushing it behind schedule, too.

By building a second 787 plant in Charleston, S.C., Boeing, which posted a $1.6 billion loss in the third quarter, has chosen to gamble again in order to address the labor risk at its existing production facility in Everett, Wash.

That quarterly loss included charges of $1 billion for delays in the 747-8 program and non-cash charges of $2.5 billion as it reclassified the first three 787s to research and development, since they no longer can be sold after so much testing.

"Boeing needs the second line to try to catch up on delays; there's no question about that," says aviation consultant Scott Hamilton. "But it's a high-risk move to put it in Charleston, which continues to be part of the problem."

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