Vought temporarily halts work on fuselages

Supplier for Boeing's 787 'Dreamliner' adjusting to delays in launch of new jet; no layoffs planned at N. Charleston plant

Brad Nettles
The Post and Courier

This is a scene that won't be repeated anytime soon: Vought Aircraft employees working on a rear fuselage section for the Boeing 787.

The Vought Aircraft plant in North Charleston temporarily has stopped making rear fuselage sections for the Boeing Co.'s 787 as the supplier adjusts to the delayed launch of the new jet.

Vought does not anticipate making any more of the barrel-shaped structural components for the 787 "Dreamliner" for at least several months, officials said.

"We would have to start back up toward the end of this year," Elmer Doty, president and chief executive officer of Dallas-based Vought Aircraft Industries Inc, said.

Like most of the rest of the Dreamliner, Vought's fuselage parts are made from high-strength composite materials that minimize the weight of the airplane and help to save fuel.

Doty, speaking with Wall Street analysts Tuesday, said workers in North Charleston are now finishing the aft section for the 19th "Dreamliner" that's set to roll off Boeing's assembly line near Seattle, probably next year.

Otherwise, he said, the local plant has "effectively ceased composites production for some time."

"We've slowed down a bunch. ... That's just the nature of things. It's going to be that way for a few more months," Doty said.

The production cut has not led to any job losses locally, said Vought spokeswoman Lynne Warne.

About 600 workers are employed at the plant off International Boulevard,

including about 270 contractors.

"We've shifted some people around, but there are no layoffs," Warne said Tuesday.

Keith Howe, the company's chief financial officer, said parts of the factory still are humming, even as activity in the fabrication shop and in other areas of the factory are tapering off.

"But we still have significant work we're pushing through in the assembly side," Howe told analysts.

Unlike most commercial airplanes, much of the 787 is being built in pieces by suppliers around the world, a strategy that has led to several high-profile delays.

The latest came in April, when Boeing pushed back the first delivery of the 787 by another six months, to the third quarter of 2009.

The Chicago-based aerospace giant originally had hoped to hand over the first copy this past spring.

The revised production schedule calls for Boeing to complete just 25 Dreamliners next year, down from the planned 112.

That means there will be less work in the short run for major suppliers like Vought, which are expected to make parts and deliver them as they are needed.

Once the fuselage orders resume, fabrication work at the Vought plant is expected to ramp up gradually, probably over the course of 2009, officials said.

"While we are currently slowing the pace of our operations, we continue to examine and develop a variety of plans that will enable us to efficiently ramp up to the production rates requested by our customer, when that is required," said Joy Romero, Vought's vice president for the 787 division.

Vought officials fielded questions about the local operations while discussing second-quarter earnings.

For the three months ended June 29, the company's profit increased more than 200 percent to $79 million, while revenue increased 12 percent to $481 million.

The bottom line at Vought got a big lift from a $47 million onetime gain from the recent sale of its stake in North Charleston-based Global Aeronautica LLC.

Reach John McDermott at 937-5572 or jmcdermott@postandcourier.com.