Boeing will share robust '07

Despite delays on the 787 Dreamliner, Boeing reported a strong 2007 financial performance Wednesday — which will trigger a big boost of extra cash next month for almost 47,000 of the aerospace giant's white-collar employees in the Puget Sound region.

Local engineers can expect an average gross payout of about $5,100 and other technical staff almost $4,000, according to the formula Boeing uses to calculate individual payments and the average wages reported by the Society of Professional Engineering Employees in Aerospace (SPEEA) union.

Other salaried staff members are also included, but hourly production workers are not eligible for the payments.

The incentive payout will inject more than $200 million, before taxes, into the local economy.

Boeing reported net profits for 2007 of more than $4 billion, up 84 percent from the previous year. Adjusted for unusual one-time charges, the increase was still up 37 percent.

Aside from the glowing earnings results, Boeing Chief Executive Jim McNerney provided no new details in a teleconference with media and analysts Wednesday morning on pressing issues such as the delays to the Dreamliner program.

He said Boeing won't complete a new flight-test and delivery schedule until March. The company will report the new schedule and the expected financial impact for 2009 on the next earnings call in April.

Because the first 787 deliveries are now pushed into 2009, Boeing reduced the projected number of commercial-jet deliveries this year by five aircraft — to between 475 and 480 jets — and has cut $500 million off its revenue forecast.

But McNerney said the business case remains "sound" and he is standing by the airplane's globalized manufacturing plan — despite the shortcomings of Boeing's supplier partners in delivering initial 787 sections so incomplete that the program delay now stretches to nine months.

"We have a good feeling about the way we are approaching this airplane despite the startup difficulties," McNerney said.

He said Boeing has "absolutely no plans to drop any suppliers."

On future airplane programs, McNerney said, "We might draw some lines in different places, but we wouldn't change the concept."

15-day payout

Boeing released details of the employee-incentive-plan payout after the earnings teleconference.

Companywide, about 113,000 current and former nonexecutive employees will get the incentive payment Feb. 21.

Anyone employed for the entire year in 2007 gets a 15-day payout, equivalent to three full weeks of extra pay, a Boeing spokesman said. The amount is prorated for those employed part of the year.

The size of the incentive payout each year depends upon Boeing's meeting preset profit targets. Meeting the targets results in 10 days extra pay. Exceeding them can raise the payout to a maximum of 20 days.

Last year, employees got 12 days extra pay. The year before it was 14 days.

The year's jump in profits came from higher sales and expanded profit margins. Revenue jumped to a record $66.4 billion, Boeing reported.

The Seattle-based commercial-airplane unit contributed just over half of that, with the value of airplane deliveries up 11 percent and a profit margin of 10.7 percent.

Boeing now has just over $12 billion in cash or liquid assets available for investment.

The company will spend about $3.3 billion on research and development this year.

Citigroup analyst George Shapiro estimates just shy of 80 percent of that will go to the commercial division, principally for the 787 Dreamliner and the 747-8 jumbo jet programs.

Not all benefit

The employee-incentive plan is designed to reward the workers who create this financial bounty. But not everyone is included.

Members of SPEEA joined the incentive plan as a result of negotiations for its 2005 contract.

But it's "a hot button" for the hourly workers of the International Association of Machinists (IAM) blue-collar union, said IAM spokeswoman Connie Kelliher.

"It's insulting to them that they are excluded," she said.

Boeing spokesman Peter Conte said that during the 2005 contract talks the union rejected a Boeing offer that included incentive-plan payouts.

Kelliher said that offer included concessions unacceptable to the union.

She said the incentive plan will certainly come up again during the upcoming IAM contract talks, scheduled to begin in a few months. The contract expires in early September.

"We keep pushing Boeing. It will be an issue this time," Kelliher said.

The market reacted positively to Boeing's earnings results. The stock closed up more than 2 percent at $82.87.

But J.B. Groh, an analyst with investment firm D.A. Davidson, said the stock won't return to last year's heights — above $100 — until the 787 is clearly back on track.

"It'll take that thing to grace the skies over Seattle before we get any real positive movement there," said Groh.

On Boeing's latest schedule, first flight is now supposed to happen around June.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com