Jim McNerney: The wing was an issue we had to wrestle through. There was some redesign that had to happen there, it took us longer than we thought, but we are largely through it. We feel comfortable with it and it did explain a lot of the non-recurring pressure that we had particularly last year.
Dominic Gates: Is that increasing the cost to about the levels of 3 to $4 billion?
Jim McNerney: It cost more than we thought it was going in, but we remain comfortable that this will be a profitable program and the business case remains strong.
Mike Mecham: Is there any thinking about a development effort on 777 to position against the A350 or are you confident that what you have got definitive 300-ER?
Jim McNerney: The A350-1000 as it comes together as Airbus has characterized it in terms of its performance would put some pressure on our longer range 777 fleet and we would have to answer the question what we would do about it. It is a wide issue. The driver is what were the real performance of the A350-1000 be and since that will not be introduced until 16ish, it is introduced after the 800 and 900, we have plenty of time to make the decision on what modification might be needed if the performance does threaten the bottom of our long range part of our 777 fleet. Given the order rates that we continue to have on 777s, I do not think the marketplace is all worried about it yet, but it will be an issue we have to address.
Mike Mecham: Is it possible you might address these issues before you address an issue on replacing 737?
Jim McNerney: It is possible and it is also possible there could be some overlap as we address both. We are asking the questions independently because there are two different market segments, but yes, you could paint a scenario where some work on the 777 would be done before the majority of the work on the next generation 37 but we do not know yet either.
Suzanne O'Halloran: You mentioned company-wide part gains in your release. Could you give some examples?
Jim McNerney: The productivity gains are across the board in our productions programs. If you looked at both on IDS and on commercial airplanes, you look at the 737 the 777 and you look at F-18, F-15, C-17 you would see good year-over-year productivity on all of our major product lines. It is an article to face each year that we will make progress there.
Suzanne O'Halloran: Your commercial plane deliveries will be flat next year, if you strip out the 787. Does that mean you have already achieved all the productivity gains with this delivery last quarter?
Jim McNerney: No. The example I would cite there is our Edward facility. There are productivity efforts that are just gaining maturity up there on the 777 in particular and on the 747 that will produce significant productivity for us even at rate. There is still productivity approvals year-over-year planned for renting as well. |