NEW YORK – Boeing cut its production plan for the 787 jet after receiving fewer orders than expected from China, which has been locked in a trade battle with Washington since last year, the company’s chief executive said Wednesday.
The U.S.-China trade situation “has presented challenges for our wide-body production plans,” Chief Executive Dennis Muilenburg said during a conference call with analysts.
The company announced Wednesday it would pare back production of the Dreamliner planes from 14 per month to 12 in late 2020.
“The lack of orders from China in the past couple of years has put pressure on the production rate,” Muilenburg said.
The move came after the United States announced on October 11 that it had reached “phase one” of a trade pact with Beijing, a de-escalation of a trade fight that has brewed for more than a year.
Muilenburg said the latest trade developments have been “productive” but that “we don’t have firm orders from China at this point.”
“We’re going to continue to monitor and support the China trade discussions,” he said.
“Those are still very important for the future. But for the purposes of our company, we have to be very disciplined in our production rate management and we’re going to continue to do that.”
The hit to Boeing orders is part of a larger pullback in US exports to China that has weighed on U.S. manufacturing amid a global economic slowdown.
Boeing on Wednesday reported a 50.6 percent drop in third-quarter profits to $1.2 billion as the grounding of the 737 Max continued to hit the bottom line.