Boeing Can’t Deliver

Chicago-based Boeing has announced its third production delay for the 787 Dreamliner, resulting in the first deliveries being at least 14 months late. First deliveries are now set for the third quarter of 2009 rather than the first schedule which promised delivery in May of 2007.

The main reason for the delays is the global supply model, which Boeing originally hoped would be the key to the new plane’s success. Suppliers are strung all over the globe, from Japan to Italy to Israel to South Carolina to Seattle, and bringing those parts together for final assembly in Washington has been very problematic. The Italian factory could not be built before it had to replant a 300 year-old olive grove, the South Carolina supplier had trouble with parts it was getting from Tel Aviv, and assembly instructions came in Italian (with no translation) to Seattle, among several of the problems. Many do not know that the aircraft Boeing first showed in July of 2007 was put together with over 1,000 temporary fasteners.
Mike Bair, a Boeing executive first in charge of the 787 until he was replaced after the first delays, said, “The right way to do this would be to have all those big parts across the street so you could just roll them in.”

So what is the point behind writing about Boeing’s troubles? To beat them up? Absolutely not. Boeing is to be applauded for its bold move in designing the plane of the future. It is, though, perhaps time to suggest a couple things that might help Boeing in the future.

1. No airline manufacturer has ever tried assembling a plane from such widespread sources. Maybe not the best idea. Keep the jobs and the production in the USA.

2. Boeing should not have moved its headquarters to Chicago. If the top brass are nowhere near the plant a lot can go wrong before anyone notices. They need to walk the factory floor every day. Move back to Seattle.

3. We do live in a global economy, but that doesn’t always mean global is the best cost solution. Any savings Boeing might have thought possible with the global approach are not only gone now, but costs are assuredly much, much higher than if the whole plane had been built here. Boeing will be on the hook for massive penalty payments due to the late delivery.

4. Don’t over-promise and then under-deliver. Setting very aggressive timelines that would be difficult to achieve even if everything went well is not helpful. If they have to announce a fourth delay there will be serious financial problems for Boeing.

(research from the Financial Times)