Boeing Doubts Grow On 767 Production
February 28, 2006
Boeing is growing more doubtful about whether it can keep open the production line for its 767 widebody jet much beyond this year, the company said on Tuesday in a regulatory filing.
Boeing said it could decide sometime this year on whether to shut down production of the aging plane, once seen as the basis of a US Air Force aerial refueling tanker program later canceled because of a procurement scandal.
"Given the timing and changing requirements for new USAF tankers, the prospects for the current 767 production program to extend uninterrupted into a USAF tanker contract (are) becoming less likely," Boeing said.
The reference to changing requirements as well as timing could be a sign Boeing thinks one of its newer commercial planes will fit the Pentagon's needs when it re-opens bidding for the tanker.
The US Department of Defense has said it expects to do so sometime this year, in a contest where Boeing is due to face off against an alliance of European rival Airbus and US contractor Northrop Grumman.
Congress in 2004 killed a USD$23.5 billion Air Force plan to buy and lease 100 Boeing 767s as tankers, after a former Air Force official admitted to inflating the price as a parting gift before taking a senior job with Boeing.
Boeing had expected to decide last year on shutting down the 767 line in Everett, Washington, but the jet was kept alive by some commercial orders as business boomed for Boeing and Airbus.
Boeing said in the filing: "It is still reasonably possible a decision to complete production could be made in 2006."
Boeing said as recently as late January that it still hoped to offer the 767 to the Air Force for the tanker plan, but Chief Financial Officer James Bell earlier this month told analysts that production of the plane would be shuttered in the absence of a Pentagon contract.
