Boeing steps up efforts to keep 787 launch on time

NEW YORK, Feb 1 (Reuters) Boeing Co.'s 787 Dreamliner is on target for its first test flight this summer, but the U.S.

planemaker is pushing hard to keep its most successful plane launch ever on schedule despite teething problems caused by its revolutionary design.

The world's first large-scale carbon composite passenger aircraft, which has racked up more than billion worth of orders in just under three years on the market, is still too heavy and Boeing is having to help struggling suppliers.

Boeing is the United States' biggest manufacturing exporter, and its financial future rests squarely on the success of the new jet.

''It's an 'Oh my god' exercise to build airplanes,'' said Boeing Chief Executive Officer Jim McNerney on a conference call with analysts, after reporting fourth-quarter results. ''But part of the task is to recognize you have a problem early and to over-resource the issue.'' Investors and customers are keeping a keen eye on its progress, fearing costly delays like the ones that hit Airbus' flagship A380 superjumbo. McNerney said the plane is on track for its first test flight at the end of August and first delivery in May 2008.

''There's always been ample reason for concern -- it's a very aggressive timetable,'' said Richard Aboulafia, an analyst at aerospace and defense consultants Teal Group. ''Boeing has a history of getting it right, but they've never outsourced so much responsibility.'' Talk that some 787 suppliers were veering off schedule sent Boeing's shares lower last week. McNerney confirmed that it was reaching out to keep some suppliers on target.

''We've continued to provide engineering and manufacturing support to our partners,'' he said, referring to the group of companies manufacturing the majority of the plane's parts. ''We continue our process of robust contingency planning.'' UNPRECEDENTED PROJECT Boeing's 787 project is unprecedented in the amount of production being handed over to other companies, many of them abroad. Boeing is focusing on assembling the parts at its Everett, Washington, facilities near Seattle.

The Japanese ''heavies'' -- Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and Fuji Heavy Industries Ltd. -- are building key parts of the carbon composite fuselage, wing box and wing.

Global Aeronautica, a joint venture between Alenia and Vought Aircraft Industries Inc., is putting together more than 60 percent of the fuselage in South Carolina, after components have been flown in from around the world.

Alenia is part of Italian aerospace group Finmeccanica and Vought is majority owned by private equity firm Carlyle Group.

McNerney said on Wednesday that half of the eight contingency plans Boeing had prepared last year in case of production problems have now been launched. Last October, he said only one had been launched.

He confirmed recent industry talk that some work on components being flown in from Japan to South Carolina was not complete, and said he was prepared for more.

''The kinds of things I'm talking about is having standby capability to make some clips and brackets in the state of Washington, in case they don't show up in some of the components that have been stuffed before they get there,'' he said.

He added that one contingency plan relating to the control data interface had been retired, because it had made better progress than expected.

McNerney said Boeing was supplying extra resources to each of its major suppliers.

''What we are doing with Mitsubishi and Alenia specifically is adding a lot of our resources to supplement theirs to get them through the knothole,'' he said. ''We're not totally out of the woods yet, but the progress is good.'' Reuters SBA VP0440