(Reuters) – Boeing Co. will take additional charges to the KC-46 tanker program due to a supplier quality issue with the center fuel tank, the company’s finance chief said Wednesday.
Boeing Chief Financial Officer Brian West did not disclose the value of the additional charges, which will be announced as part of the company’s first quarter earnings, but said margins at its defense business would be negative as a result.
Earlier this month, the company confirmed that deliveries of the Boeing 767 freighter and KC-46 tanker were delayed as a supplier had not completed processes related to cleaning and paint adhesion on the center fuel tanks.
“We know how to fix this,” West said. “But now we have to go implement the fix both on production airplanes and some airplanes that are in the fleet.”
Boeing has taken $6.8 billion in charges on the tanker program since it was awarded a $4.9 billion contract by the U.S. Air Force in 2011.
(Reporting by Valerie Insinna; Editing by Toby Chopra and Bernadette Baum)
