Boeing posted a company-wide fourth-quarter loss of $56 million, resulting mainly from its two-month-long machinists strike and a charge related to the delay of the 747-8 program, the company announced on Wednesday morning. Revenues at Boeing Commercial Airplanes (BCA) dropped 15 percent, to $28.3 billion, as the division delivered 105 fewer airplanes than expected due to the strike. BCA operating earnings dropped 67 percent, to $1.2 billion, and margins fell from 10.7 percent to 4.2 percent. Including the effects of its inability to collect on advance payments for the 787, Boeing estimates that the strike reduced full-year earnings at BCA by $1.8 billion.
“A small percentage of underperforming programs can have a big impact to overall results, and we are addressing that reality in our plans for 2009,” said Boeing CEO James McNerney. “The work statement on the [the 747-8] has expanded since the start of the program to meet performance commitments to our customers and to recover from our original underestimation of the scope of engineering work that needed to be done on this airplane. The resulting design changes, which have been substantial, coupled with limited availability of engineering resources to do the work drove the schedule change we announced in November. Since then, a full assessment of the supply chain impact of these and other additional design changes along with increased pension costs resulted in the reach-forward loss we recognized in the fourth quarter.”
