Vought ends composite production to accommodate 787 schedule

Washington DC
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Boeing 787 supplier Vought Aircraft has ended its composite production on the aircraft as it works with the airframer to adjust for a revised delivery schedule.

Vought is the supplier for two of three sections of the 787's aft fuselage, and procures the third section from the manufacturing division of Korea Air Lines.

During an earnings call today CEO Elmer Doty explained aircraft number five is scheduled for shipment this month with 96% of its systems installed. Vought is in the process of completing fabrication of fuselage barrels for aircraft number 19 and "has effectively ceased composite production for some time", says the chief executive.

Work has slowed in Vought's Charleston, SC facility in some areas such as bonding and fabricating, says Doty. But he explains Vought still has significant work to push through the assembly line with a lot of the work driven by suppliers feeding into the assembly process.

Vought has the capacity to "easily go to a levelized production rate of two per month", says Doty, but he foresees more of an upward slope. Most of the projections he has seen "suggest a more gradual step-up through the next 16 months or so".

Initial fuselage sections delivered to Boeing by Vought with a fraction of the parts installed helped to foster a traveled work crisis that was part of an approximately 15 month delay of the first aircraft delivery.

Vought's cumulative investment in the 787 has reached $411 million, and CFO Keith Howe stresses the aircraft "continues to be a large cash outflow" for the company.

To help support the cash outlay Vought during the first quarter closed on $200 million in loans and secured a $122 million cash advance from Boeing.

Negotiations between Vought and Boeing regarding schedule delays and engineering changes to the 787 contract continue. Howe points to some significant changes that carry large dollar amounts.

Vought's CFO believes the company is "negotiating well within the contract provisions".

A $47 million gain from the sale of Vought's share of Global Aeronautica to Boeing contributed to the $53 million rise in the company's net income year-over-year for the second quarter to $79.3 million. Global Aeronautica is now a joint venture between Boeing and Alenia that builds the 787 centre fuselage.

Check out our new aircraft profile of the Boeing 787