Predicts Up To 10 Percent Loss Of Order Backlog

Boeing's chief executive said this week the financial crisis in the US is spreading, and may require Boeing to finance more of its customers' aircraft purchases and absorb some cancellations.

Bloomberg reports Boeing CEO Jim McNerney (right) told the Chief Executives' Club of Boston the risk to the company's backlog tends to be, "...in the 5 to 10 percent range. It could be a little worse, could be better than that. We'll have to monitor the situation to see."

Boeing already may face cancellations in its struggling 787 Dreamliner development program, which has been hit with 18 months of delays, not counting the current strike by the machinists union and another threatened by engineers for December 1.

McNerney said union talks remain "at a standstill," and the company insists the outsourcing of some production jobs to offshore contractors is an issue of "management rights."

Both Boeing and Airbus have long order backlogs, after a three-year frenzy of new orders driven in part by middle eastern countries flush with oil revenues, and airlines looking to retire older, less fuel-efficient planes.

Boeing says about 90 percent of its $275 billion commercial backlog is from outside the US. The company's estimate that 10 percent of its order book may be at risk is a sharp contrast to predictions by Airbus, which has warned that as much as 27 percent of its backlog could evaporate in a recession.

FMI: www.boeing.com