Overruns worry Boeing CFO

The Boeing Co. said it has reduced travel costs by a third and will keep cutting jobs this year as the recession hurts airlines’ profits, the Pentagon axes programs and delays mount on the 787.

The 787 Dreamliner’s setbacks are “having a significant impact on our financial performance,” chief financial officer James Bell said in a memo posted Thursday on the Chicago-based company’s internal Web site.

“The cumulative impact of schedule delays on this program has resulted in significant cost overruns and penalty payments to customers that are putting pressure on the program’s profitability and increasing our cash requirements,” Bell said.

The Dreamliner is indefinitely postponed while engineers reinforce sections along the wing. The aircraft has been set back five times from its original May 2008 target to enter service, and Boeing said in July that it was assessing whether it may have to take a charge this quarter if the delays push costs above expected revenue in a certain block of sales.

The $4 billion of new, long-term debt issued over the past few months “is not a permanent solution,” the CFO said.

Boeing is about halfway through 10,000 job cuts and will keep shrinking the labor force as airlines order fewer aircraft and the U.S. Defense Department scales back fighter and missile-defense programs that Boeing is involved in, Bell said.

The Dreamliner’s first flight now may be slated for late November or early December, with the first delivery in the fourth quarter of 2010, according to a posting Thursday on’s FlightBlogger site.

The blog cited unidentified sources familiar with the schedule and said that Scott Carson, the head of the company’s commercial operations, has already viewed an internal document with a preliminary timetable including planning for production and deliveries.