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Boeing CEO on 787: 'The Most Successful Widebody We've Made'

CHICAGO (TheStreet) -- Boeing (BA) said Wednesday that investigations of failures in the 787's lithium-ion batteries won't significantly impact its financial results and won't cause it to adjust 787 production or to eschew lithium-battery technology.

At the conclusion of Boeing's fourth-quarter earnings call on Wednesday, CEO Jim McNerney was asked what the company is saying to employees at its Charleston, S.C. plant about the only product they build.

"We're telling them, 'No. 1, you're doing a hell of a job,'" McNerney responded. "'No. 2, keep charging. You're part of what is going to be the most successful widebody that our company has ever made.' That's what we tell them."

In fact, Boeing plans to deliver 60 of the planes this year; to boost 787-8 production to 10 a month by the end of the year; to begin production of a newer model, the 787-9, and to review the outlook for the 787-10.

The Federal Aviation Administration grounded the 787 on Jan. 16 following two incidents. On Jan. 7, at Boston Logan Airport, the lithium-ion battery used by the auxiliary power unit in a Japan Airlines 787 began to smoke and then caught fire while the plane was parked. On Jan. 15, an All Nippon Airways jet made an emergency landing after a battery overheated, spraying hot chemical residue into the electronics bay. The two Japanese airlines operate nearly half of the 50 Dreamliners now in service.

Now the FAA and Japanese regulators are reviewing the cause of the battery problems.

"Job one on the 787 is supporting the investigation underway," McNerney said, during the earnings call. "We rigorously support the process because it gets to the right answers the right way. We do believe good progress is being made in narrowing down the potential cause of the events

"We look forward to returning the airplane into service and our customers are looking forward to that as well," he said. "It will continue to serve our customers for decades to come."

Responding to questions from analysts and reporters, McNerney said people and resources are not being diverted from other areas to solving the 787 problems. Asked about reports that Boeing has replaced dozens of batteries on the 787, he said, "Batteries are replaced on our airplanes every day" and that safety concerns have not played a role. However, the replacement cycle is "slightly higher than predicted," he said.

During the quarter, excluding items, Boeing earned $978 million, or $1.28 a share; analysts surveyed by Thomson Reuters had estimated $1.19 a share. Shares closed Tuesday at $73.65. In early afternoon trading, they had gained 85 cents to $74.50.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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