Boeing keeps making mistakes -- and paying for them


When will Boeing's (BA) problems end? The latest setback: It has announced that it will take a $1 billion charge for problems with its next-generation jumbo jet -- the 747-8. According to the New York Times, those problems include design changes, insufficient engineering resources and an eight-week strike.

This reminds me of what Morgan Stanley (MS) analyst, Heidi Wood, told me about Boeing CEO Jim McNerney when he took over in 2005. At the time, Boeing was on a roll, and her thought about McNerney was: "Don't f@#$ it up!" Snafus like this $1 billion charge are just what she feared. The Times reports that $640 million of the charge is for higher costs to produce the 747-8, and the balance is for higher fixed expenses and "volume-based penalties to suppliers."