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Boeing says may have decision on 737 by end of year

Boeing Commercial Airplanes President and CEO Albaugh speaks at ceremonial roll-out of 1,000th 767 jetliner at Boeing's Commercial Airplane
Boeing Commercial Airplanes President and CEO Albaugh speaks at ceremonial roll-out of 1,000th 767 jetliner at Boeing's Commercial Airplane

By Kyle Peterson

PARIS (Reuters) - Boeing Co is aiming to make a decision on whether to re-engine or redesign its 737 narrowbody by the end of the year, but it is not making any promises, the chief executive of Boeing's commercial airplanes division said on Sunday.

Speaking to reporters a day before the start of the Paris Air Show, Jim Albaugh reiterated that the company would not be pressured into making a hasty decision on the future of its hottest selling plane.

"We're going to drive toward a decision in a disciplined fashion probably by the end of the year," Albaugh said.

The company is considering whether to upgrade its 737 with a more fuel-efficient engine or redesign the plane completely. The company has delayed the decision since last year.

Albaugh's boss, Boeing CEO Jim McNerney, was quoted in a French newspaper, however, as saying the company might issue its decision as late as early 2012.

The company has said repeatedly that it is leaning toward a full redesign if it can accomplish the task and deliver the planes to customers as promised. A re-engined plane could be brought to market quicker, but a redesigned plane could offer better efficiency.

Boeing says it has not ruled out re-engining. The company's top rival EADS unit Airbus said last year it would put a new engine on its competing A320.

Albaugh also said Boeing might design a stretched version of its upcoming 787-9 Dreamliner. This new version of the Dreamliner, dubbed the 787-10, could be in the works as early as 2016, he said.

Boeing for years has toyed with the idea of a 787-10, which could compete with the Airbus A350-900. Albaugh said he envisioned a plane with a range of 7,000 nautical miles and seating room for about 320 passengers.

"I don't anticipate a lot of engineering to do. And we haven't finalized what the schedule is. But if somebody asked me today what is was, I'd say 2016," Albaugh said.

Boeing's 787 Dreamliner is a light-weight, carbon-composite plane that offers improved fuel efficiency to airlines. The company expects to deliver the first 787, which is three years overdue, to a customer in the third quarter of this year.

Albaugh also addressed a complaint lodged against the company by the National Labor Relations Board (NLRB) claims Boeing decided to open new operations for 787 wide-body assembly in non-union South Carolina to punish the International Association of Machinists for past strikes.

Hearings on the NLRB complaint began last week in Seattle. The $750 million facility with 1,000 workers opened on June 10. Boeing received grants and incentives from South Carolina that could total $900 million if it employs 5,000 people.

Albaugh rejected the complaint, saying that no existing work was moved from Washington to South Carolina, where it intends to produce three 787s a month to compliment the seven it plans to assemble each month in Washington. Albaugh said the NLRB complaint was without merit.

"What we want is to have the ability to be competitive and also have the ability to be an assured supplier, someone that won't be affected by work stoppage," he said.

(Editing by Jane Merriman)

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