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QUESTION : What factors created a bottleneck on boeing's operations?

By GEORGE TIBBITS The problems will result in a The unexpected size of the loss The Associated Press rre loss for the third quarter and sent Boeing's stock tumbling more will hurt earnings into next year, than 7 percent, or by $4 a share, te SEATTLE Business is so the company said Wednesday. $50. Wednesday afternoon on the good at the Bocing Co..that it's We knew that we were going New York Stock Exchange, drag losing money to have significant problems in ging down the Dow Jones indus- The world's largest manufacturer ramping up our production," Boe trial average. of commercial jets is so swamped ing spokesman Paul Binder said. Boeing, which will announce with orders and is so far behind The problems will cost Boeing earnings Friday, will experience - that it will cost the company about $1.6 billion before taxes in only its third quarterly loss in the $2.6 billion in the coming year. the third quarter ended Sept 30, last 25 years. said Phil Condit, chairman and A year ago, it camed $254 mil. Late aircraft deliveries, a lack of chief executive. Even if Bocing's lion in the period. skilled labor, parts shortages and a production recovery plan works, In contrast to the current trou. snarled assembly line have resulted additional disruptions will add $bles, the last loss came as Bocing from an unprecedented increase in billion in costs through 1998, he was paying for an early retirement production. said, program to cut employment by ders that it's losing money 12,000 two years ago Whitlow, manager of the Safeco 1990s because of a global recession Blindsided by the sudden tum- Northwest Fund. and a drop in travel due to Gulf around in orders, Boeing has hired So much work was being done War fears. But when airlines be- 32,000 people in the past 1 V2 years out of sequence on the 747 as- came healthy again, they bought and plans to hire more. sembly line In Everett, Wash., that planes. Boeing said two weeks ago it Bocing halted it for 20 working In 1994, airlines ordered 120 would halt new production of 747- days to catch up, Boeing planes worth about $7.8 400 jetliners for a month and slow And duting flight tests for Boe billion. some 737 production to try to un- ing's new-generation 737-700,- So far this year, Boeing has an- scramble problems caused by its at- flaw was found in the horizontalnounced orders for three times as sempt to more than double the stabilizer design. many jets - 355 - worth about number of aircraft It makes. Fixing that forced Boeing to stop $25 billion. "If you judge by the number of final assembly on the new 737s for Bocing now produces about 40 people they've hired and the size 25 days. planes a month, with a mal of 43 of the writeoff the problem is Two years ago, Bocing was turn by next spring -48 if production greater than they anticipated and ing out just 17 planes a month. of newly acquired McDonnell Dou- Wall Street anticipated," said Bill Orders plummeled in the early glas is factored in