Posted: Tue, Jul 15, 2003, 3:01 PM ET (1901 GMT)
The Boeing Company announced Tuesday that it would take a $1.1 billion charge against earnings in its fiscal second quarter due to the poor performance of its launch vehicle and satellite businesses. The majority of the charge — $835 million — will be assessed against its Delta 4 launch vehicle program because of a lack of commercial business. The company announced Tuesday that it no longer plans on any commercial launches by the Delta 4 for at least the next five years, because of the company's inability to find customers willing "to pay a premium price for a reliable launch vehicle." Instead the company will focus on government business for the Delta 4, and expects to capture half of the available government launches from Florida in competition with Lockheed Martin, and all the launches from Vandenberg AFB in California, where Lockheed has no facilities for its Atlas 5. The company will also assess a $265 million charge against Boeing Satellite Systems to cover cost growth in several government and commercial satellite programs. Company officials said in a conference call with financial analysts that the company will make a number of management changes in the launch and satellite businesses in the next week, and announced that Boeing CTO David Swain will become COO of Boeing's Integrated Defense Systems unit, which includes the launch and satellite businesses.
