Boeing to cut production rates.
11 October 2008 @ 09:52
Although The Boeing Co. has a record backlog of orders and had been raising production rates to get more planes to customers, the global financial crisis and credit crunch will result in many of those orders being canceled or deferred, a Wall Street analyst said Friday. Another analyst predicted that because of the ongoing Machinists strike and other factors, the first 787s won't be delivered to airlines until early 2010, rather than in the third quarter of next year. Boeing can be expected to update the status of its 787, and provide analysts with a better understanding of the impact of the credit crunch on its customers and its delivery schedule, when it reports on third-quarter earnings Oct. 22. "We believe that the inability to obtain financing will cause customers to defer or cancel orders," Goldman Sachs analyst Richard Safran wrote in a note to clients. "As a result, we believe (Boeing) will lower production rates." Boeing will have to drastically cut deliveries in 2010, he predicted. Safran lowered his estimate of how many planes Boeing will deliver in 2009 to 462, down from 489. But in 2010, he said, Boeing will deliver only 392 planes. That's well off Safran's previous estimate of 524.
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