Tulsa World: Investors sue Boeing over 787 reports

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Investors sue Boeing over 787 reports

By ANDREW M. HARRIS Bloomberg News
Published: 11/18/2009 2:23 AM
Last Modified: 11/18/2009 9:54 AM

Boeing Co., whose development of its 787 Dreamliner jet has been delayed more than two years by production difficulties, was sued by investors claiming that company executives made misleading public statements about when the aircraft will be flight ready.

The employee retirement system for the city of Livonia, Mich., filed the complaint Friday in U.S. District Court in Chicago, seeking class-action status on behalf of all investors allegedly misled by statements made between May 4 and June 22.

Also named as defendants were Boeing CEO James McNerney and Scott Carson, who has led the Chicago-based company's commercial airplane division.

"As the date for the maiden flight of the 787 approached, defendants made a series of misleading statements to the market concerning the results of the testing process for the 787 and Boeing's ability to meet the schedule for the first flight and the delivery of the 787," the complaint states.

Boeing initially planned to deliver its first jets to customers in May 2008. That date has been postponed five times, most recently in June, when engineers discovered structural problems where the plane's wings are joined to the fuselage.

Components of the 787 are being manufactured in Tulsa by Wichita-based Spirit AeroSystems Inc. Officials of Spirit say their company's contract work has not caused any of the problems linked to the delays.

In a statement filed Tuesday with the Securities and Exchange Commission, Boeing said a second lawsuit, making similar allegations, was filed against it in federal court in East St. Louis, Ill.

"The company believes the lawsuits are without merit and will vigorously defend them," it said.

The Livonia pension fund accuses the company of making false and misleading statements in violation of U.S. securities laws. It seeks unspecified money damages.

The Tulsa World Business staff contributed to this story.

By ANDREW M. HARRIS Bloomberg News

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	Report Comment FS, Broken Arrow (11/18/2009 11:50:54 AM) A high school friend who is involved in this project tells me Boeing's reliance on outsourcing and trusting others to come up with production methods is what bit them in the posterior. The USA has been, for years, the number one manufacturing entity on the planet but in the interests of political correctness and the pursuit of greater profits and executive bonuses, we have lost that title. Any fool on the plant floor could have accurately called this outcome years ago when the project started (and probably did).
	Report Comment DaveMoore1, North Charleston (11/27/2009 3:58:31 AM) Unrealistic timelines were given with this from the beginning. A partially complete shell was then used in the roll-out ceremony to suggest a complete and ready to aircraft, when a minimum of 18-24 months of work was known to be required for an operational aircraft. Delays were then given incrementally to minimize the effect to the stock prices.
	Report Comment DaveMoore1, North Charleston (11/27/2009 4:01:17 AM) Unrealistic timelines were given with this from the beginning. A partially complete shell was then used in the roll-out ceremony to suggest a complete and ready to go aircraft to generate publicity and sales; a minimum of 18-24 months of work was known to be required for an operational aircraft. Delays were then given incrementally to minimize the effect to the stock prices.

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