On a wing and a prayer: Outsourcing at Boeing

Author: 
KYLE PETERSON | REUTERS
Publication Date: 
Thu, 2011-01-20 23:38

“There’s obviously a lot that gets press these days,” said
Jeffrey Standerski, vice president and general manager of Rockwell Collins’ air
transport systems. “But I’ll tell you what: It’s really phenomenal when you
think about the success that the Boeing systems are having in the flight test
program.”
Rockwell Collins makes cockpit electronics for the
Dreamliner. The company has a contract with Boeing valued at $3.5 billion over
the life of the Dreamliner program.
Standerski describes a cohesive design and manufacturing
process that involves constant communication between Boeing, Rockwell Collins,
Honeywell International, GE and Hamilton Sundstrand, who also work on airplane
systems.
He said Boeing contacted suppliers in the earliest stages of
the 787 program and set up identical labs for engineers at the various
companies. “Things have gotten more obviously complex on airplanes because of
the increased functionality that is on airplanes,” Standerski said.
Integrated architecture eventually will become the norm in
plane-making, Standerski said, noting comparable construction practices on the
Airbus A350. “It’s going to continue to force companies to innovate,” he said.
“It’s going to continue to force companies to make the investments in research
and development to make sure that we’re working on the technology for those
next-generation airplanes.”
By now, Boeing has about 850 orders for the Dreamliner on
its books from airlines and aircraft leasing companies all over the world. It’s
a record number of orders for a plane still in development.
Aviation experts remain thrilled by the plane’s reported
fuel-efficiency as well the promise of a smooth, quiet, comfortable ride for
passengers. Their delight was on full display in July when hordes of plane
spotters gathered on the perimeter of the Farnborough Airshow in England to
watch the Dreamliner land after its first overseas flight. Aviation buffs
inside and outside of Boeing frequently call the 787 a “game-changer.”
“It’s still a plane with a very broad and eager market,”
said Teal Group’s Aboulafia. “It’s going to take them a long time to make money
with this. But eventually — assuming it works out — they’re going to sell
thousands.”
Meanwhile, the more than 50 customers for the plane have
mostly withheld public criticism of Boeing, despite the havoc that delivery
delays play with their long-term fleet planning.
Analysts believe Boeing has probably already paid out
hundreds of millions of dollars in penalty payments for late delivery.
Boeing has not said what it has spent on the Dreamliner
program so far. But experts believe the plane is at least several billion
dollars over budget.
In the end, the Dreamliner will be judged on its safety,
reliability and ability to deliver on its many promises, said Ray Goforth,
executive director of the SPEEA union in Seattle.
“The real test on the 787 is going to come in its first year
in service,” he said.
The reliability rate of the Dreamliner will have to be near
100 percent to appease cost-conscious airlines that cannot afford to have a
plane frequently out of service for repairs.
“If it turns out that this thing is a dog because more and
more of these problems are still cropping up, you are going to have to fix them
quick and keep that level of confidence in the plane, or those orders will just
evaporate,” Goforth said.
At the same time, the Dreamliner and Boeing will also be
judged on their impact on US labor and American engineering.
The Dreamliner will be delivered sooner or later. And
someday the same planes now parked in Everett may be the first of thousands of
787s to take their place in the skies among other Boeing icons like the jumbo
747 and the shorter-range workhorse 737.
But Boeing employees in the Puget Sound region are
increasingly bitter about a corporate culture they say erodes the skills of
American workers and makes their company less attractive to young people
entering the job market. They hope Boeing leaders will soon see things their
way.
Judging by its statements — including the emailed comments
to Reuters — the company and its critics may not be so far apart on the issue
of outsourcing.
“We made too many changes at the same time — new technology,
new design tools and a change in the supply chain — and thus outran our ability
to manage it effectively for a period of time,” the company said. “In short, we
have learned, and we are applying our learning.”

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