AVIATION Boeing slows payments to suppliers as it accelerates cost-cutting

NEW YORK - Boeing Co. is stepping up efforts to conserve cash, cut costs in its supply chain and trim inventory of parts in its factories, while telling vendors it will take longer to pay bills, Boeing and aerospace industry executives said.

Under the new terms, Boeing is taking up to 120 days to pay, rather than 30 days in the past, these people said. The new payment schedules are being rolled out this year.

Boeing is reducing its factory inventory and relying on suppliers to hold parts instead, these people said. The moves come at a time when investors are closely watching Boeing's cash flow.

In a statement to Reuters, Boeing confirmed the changes in payment and inventory terms, saying they were necessary to compete when airlines want more capable planes at lower prices.

'To align with industry norms” and remain competitive, 'we are in the process of adjusting the payment terms of our large suppliers,” spokeswoman Jessica Kowal said in the statement. 'In most, if not all cases, our new payment terms are in line with their payment schedules to their own suppliers.”

Rockwell Collins in Cedar Rapids supplies avionics and communications equipment to Boeing. Pam Tvrdy-Cleary, Rockwell Collins director, brand and media strategy, said the company is aware of Boeing's initiatives to improve cash flow.

'We are working with them on a solution that will be mutually beneficial to both parties,” Tvrdy-Cleary said.

Rockwell Collins is scheduled to report its third quarter fiscal year 2016 financial results on July 25.