CHICAGO (AP) - Boeing Co. CEO Jim McNerney on Wednesday defended the company's reliance on overseas suppliers in building its 787 jetliner despite admittedly "big stutter steps," saying the new plane's innovations give the company a five-year lead over rival Airbus.
His remarks came as Boeing executives provided assurances to investors that the 787 program is sticking to the latest timetable after numerous delays over the past year.
Pat Shanahan, vice president and general manager of the program, reiterated that the first plane is on track for the "power on" milestone by the end of next month.
"We have made great progress since March and we're on track to make these commitments," he said at the company's annual investors meeting in Seattle, which was broadcast over the Internet.
Despite the reassurances, Boeing shares tumbled $3.95, or 4.6 percent, to $81.19 on Wednesday, hurt by the steep drop of stocks of its airline customers amid ever-rising oil prices.
McNerney said Boeing's new strategy of using outside contractors for the bulk of its airplane manufacturing needs refinement but will continue for future aircraft.
"We're going to learn from it, move on and do it better next time, because it's the right model," he said.
Fifty-eight airline customers have placed 896 orders for the much-anticipated 787. Boeing touts the plane for its greater fuel-efficiency potential since it's the first large jetliner to be built mostly from lighter, carbon-fiber composites.
But the Chicago-based company has lost credibility, and billions of dollars in expected additional costs and penalties, with three delays in the 787's delivery schedule that leave it more than a year behind the original schedule.
The initial test flight now isn't expected to take place until the fourth quarter, with the first delivery to All Nippon Airways targeted for the third quarter of 2009.
McNerney said that while there have been problems in carrying out the global supply chain strategy, the company is now working more closely with suppliers and removing the bottlenecks on its final assembly line, which got bogged down as Boeing employees had to tie up loose ends caused by suppliers.
The supply-chain glitches notwithstanding, he said, "We have gotten the innovation piece of it right. ... In fact, we believe the design innovations embedded in the 787 has given us roughly a five-year lead on the competition." Besides its fuel savings, Boeing says the 787 will be cheaper to maintain than planes of comparable size and will have passenger-friendly features such as bigger windows and a more comfortably pressurized cabin.
His remarks came as Boeing executives provided assurances to investors that the 787 program is sticking to the latest timetable after numerous delays over the past year.
Pat Shanahan, vice president and general manager of the program, reiterated that the first plane is on track for the "power on" milestone by the end of next month.
"We have made great progress since March and we're on track to make these commitments," he said at the company's annual investors meeting in Seattle, which was broadcast over the Internet.
Despite the reassurances, Boeing shares tumbled $3.95, or 4.6 percent, to $81.19 on Wednesday, hurt by the steep drop of stocks of its airline customers amid ever-rising oil prices.
McNerney said Boeing's new strategy of using outside contractors for the bulk of its airplane manufacturing needs refinement but will continue for future aircraft.
"We're going to learn from it, move on and do it better next time, because it's the right model," he said.
Fifty-eight airline customers have placed 896 orders for the much-anticipated 787. Boeing touts the plane for its greater fuel-efficiency potential since it's the first large jetliner to be built mostly from lighter, carbon-fiber composites.
But the Chicago-based company has lost credibility, and billions of dollars in expected additional costs and penalties, with three delays in the 787's delivery schedule that leave it more than a year behind the original schedule.
The initial test flight now isn't expected to take place until the fourth quarter, with the first delivery to All Nippon Airways targeted for the third quarter of 2009.
McNerney said that while there have been problems in carrying out the global supply chain strategy, the company is now working more closely with suppliers and removing the bottlenecks on its final assembly line, which got bogged down as Boeing employees had to tie up loose ends caused by suppliers.
The supply-chain glitches notwithstanding, he said, "We have gotten the innovation piece of it right. ... In fact, we believe the design innovations embedded in the 787 has given us roughly a five-year lead on the competition." Besides its fuel savings, Boeing says the 787 will be cheaper to maintain than planes of comparable size and will have passenger-friendly features such as bigger windows and a more comfortably pressurized cabin.
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