Boeing may shut 767 line, revive it if tanker deal flies

WICHITA, Kan. — If Boeing decides by midyear to halt production on its 767 assembly line in Everett, the line could be restarted upon winning a Pentagon contract for air-refueling tankers, Chief Executive Harry Stonecipher said yesterday. "If the tanker program doesn't come on in a timely basis, then we are going to have a line break," Stonecipher said, reiterating Boeing's plan to make a decision soon. "Then restarting the line costs somebody some money."

Speaking before the rollout of a 767 modified into a tanker for the Italian Air Force, the head of the Chicago-based aerospace giant said a shutdown 767 line could be restarted if the U.S. Air Force moves ahead on a contract to replace its aging fleet of KC-135 tankers.

But such line breaks are expensive and inconvenient, Stonecipher said.

Until yesterday, Boeing had not publicly discussed this possibility. The costs of closing then restarting the line would increase the price tag on any new Boeing tanker bid.

Signaling another potential shift, Boeing's defense-unit chief, Jim Albaugh, said the company was considering creating a dedicated military production line for the 767.

Currently, Boeing flies 767s to Wichita for the military modifications that convert a commercial passenger airliner into an air-refueling tanker.

With a dedicated military assembly line here, Boeing might instead do most of the modifications in Everett.

Such a move, which could come barring further commercial orders for 767s, would help reduce costs and improve the competitiveness of Boeing's 767 tanker program, Albaugh said.

A similar decision to create a dedicated military production line in Renton helped Boeing last year to win the Navy's Multimission Maritime Aircraft contract. That military jet is based on converted 737 passenger jets.

Having military production lines in both Everett and Renton would be a big change at the two commercial-jet factories.

Production would be guarded and screened off from other lines, and non-U.S. citizens would be barred from entry into that part of the factory.

Last year, Congress rejected a previously approved $23 billion deal for 100 air-refueling tankers, citing ethical concerns about the role of a former Pentagon procurement official.

Darleen Druyun is serving a nine-month prison sentence for lining up a job with Boeing while she was overseeing the contract review. One-time Boeing Chief Financial Officer Michael Sears was sentenced last week to four months in prison for illegally negotiating to hire Druyun at the same time she was reviewing the bid.

The Pentagon is expected to reopen the tanker competition later this year. Boeing's only serious competition for the contract would likely be from Europe's Airbus.

Reuters and Seattle Times business staff contributed to this report.