Re: end of the line for the MD-11

Date:         16 Jun 98 02:15:09 
From:         Colleen M Wabiszewski <colleen.m.wabiszewski#064#boeing.com@mail.mdc.com>
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Karl Swartz wrote:
> Last Wednesday, Boeing announced the termination of MD-11 production
> after completion of remaining orders.

>Im not surprised of the decision but surprised that the decision was
>taken that fast. I expected such a decision not before the end of the
>year.

The reason we were given here in Long Beach for the quick decision was
part order lead times.  The company had to make a commitment in the
short term to order parts to build the MD-11throughout the year 2000.
As you may know, the more parts you order, the cheaper the price you can
negotiate on the individual part.  So if you buy a year's worth of
production parts, you can get them cheaper than if you buy three months'
worth or even six months' worth.  Production positions for the year 2000
were not sold out, and the expectation that they would be sold out in
the near future was low.  While there were customers interested in the
aircraft, none were ready to buy right now.  Another reason, though
inofficial, is that they are investing money to modify the production
facilities to accomodate the 737 final assembly work - perhaps they felt
there wasn't enough room here for three lines.

I'll add the standard disclaimer about these being my opinions and not
BCAG's.

Colleen Wabiszewski
colleen.m.wabiszewski@boeing.com