V
ought Aircraft Industries will borrow another $200 million from banks to finance its continued work on the Boeing 787 program, according to documents filed with the Securities and Exchange Commission.
What's interesting about Vought's filing as well as its fourth quarter 2007 report is they give a lot of insight into the enormous investment Vought is having to make as risk-sharing partner in the development of the 787.
Vought has never publicly disclosed its total investment in the 787, but it spent $276 million last year alone as it completed facilities, installed machinery and began ramping up production of 787 components for Boeing. Most of the new loan proceeds will also be used for 787 spending.
The above referenced SEC filing indicates that Vought does not expect to make a profit on its 787 work until 300 aircraft have been produced, several years from now. Presumably that applies to all the other partners as well, including Boeing.
Dallas-based Vought, along with other 787 suppliers, has been leaning on Boeing to renegotiate their financial agreements. Initially, as partners, they would not be paid until Boeing started delivering airplanes and collecting payments from the airlines. As the costs have risen and Boeing has delayed deliveries, the suppliers have been strapped for cash.
Spirit AeroSystems of Wichita, which builds 787 nose and fuselage sections, recently announced it had renegotiated financing terms with Boeing and has received an initial $124 million payment.
In its SEC filing, Vought says it has reached an "interim partial agreement" with Boeing on a revised payment structure. The company recently sold its interest in Global Aeronautica, a 787 assembly operation in Charleston, S.C. to Boeing for an undisclosed amount of cash.
Vought is building the two rear-most fuselage sections of the 787 at its own Charleston plant. About 400 Vought engineers in Dallas have worked on the design of the 787.
- Bob Cox